My Account
We work with leading UK technology insurers
SOFTWARE PI VS CYBER INSURANCE – WHICH DOES YOUR BUSINESS NEED?
Two different policies – both critical for software and SaaS businesses
Professional Indemnity (PI) responds when your work, code or advice causes financial loss. Cyber Insurance responds when a cyber event disrupts your systems or compromises data. Most software companies benefit from a combined approach.
What is Software Professional Indemnity (PI)?
PI insurance (also called Tech PI or Professional Liability) protects your business if a client claims that your software, configuration, advice or implementation caused them financial loss.
PI typically covers:
- Programming errors and defects in software
- Incorrect configuration or implementation
- Failure to meet a specification or scope
- Financial loss from functionality not working as promised
- Negligent advice or consultancy
- Breach of professional duty in delivering a project
PI is triggered when:
- A client alleges your work caused them financial loss
- You are accused of making an error or omission in your service
- You face a contractual dispute linked to deliverables
- There is a claim relating to incorrect implementation or integration
- You need defence costs for a professional negligence allegation
What is Cyber Insurance?
Cyber Insurance responds to cyber events such as hacking, ransomware, data breaches and system outages. It focuses on the security, integrity and availability of your systems and data.
Cyber typically covers:
- Cyber attacks and hacking incidents
- Ransomware and cyber extortion
- Data breaches and privacy events
- Business interruption from cyber events
- Forensic IT and legal costs
- Notification, PR and crisis management
Cyber is triggered when:
- Your systems are compromised or encrypted
- Data is stolen, deleted or exposed
- A cyber event shuts down your SaaS platform
- You suffer loss of revenue due to downtime
- You must notify customers and regulators
- You need specialist incident response support
Key Differences: Software PI vs Cyber Insurance
PI and Cyber can overlap but are designed to protect different aspects of risk. Many contracts now ask for both.
Software PI focuses on:
- Your professional service and advice
- How your code, build or implementation performs
- Errors in design, configuration and integration
- Financial loss suffered by a client
- Contractual performance and scope
- Negligence in delivering a software project
Cyber Insurance focuses on:
- Security of your systems and data
- External attacks and internal mistakes
- How you respond to a cyber incident
- Regulatory and notification obligations
- Your own business interruption and costs
- Rebuilding trust after a cyber event
Which Cover Does My Software Company Need?
The answer depends on what you do, who you sell to, and what your contracts demand. Most established software companies arrange both PI and Cyber as a minimum.
PI is essential if you:
- Develop or configure software for clients
- Provide implementation or integration services
- Offer consultancy or technical advice
- Sign SLAs based on functionality or outcome
- Deliver bespoke builds or complex integrations
Cyber is essential if you:
- Operate a SaaS or cloud platform
- Store or process customer data
- Connect to third-party APIs or payment gateways
- Need to meet security or compliance standards
- Would lose revenue if systems went offline
“Insure24 helped us understand the difference between PI and Cyber, then arranged a combined programme that satisfied our enterprise clients.”
Founder – B2B SaaS PlatformFREQUENTLY ASKED QUESTIONS
+>- Do software companies need both PI and Cyber Insurance?
In most cases yes. PI protects against errors in your work or code, while Cyber protects against attacks, breaches and cyber incidents.
+>- Does PI Insurance cover data breaches?
No. Data breaches are usually covered by Cyber Insurance, not PI. PI responds to professional mistakes and project-related losses.
+>- Which cover do clients usually ask for in contracts?
Many enterprise contracts now request both PI and Cyber, with minimum limit requirements for each. We can help you interpret contract wording.
+>- What limits should we choose for PI and Cyber?
This depends on your revenue, client size, contractual expectations and data exposure. Many software businesses start from £1m and increase as they grow.