Getting the Right Business Insurance To Get Bigger Development Contracts

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Smaller app development companies face a number of obstacles when attempting to acquire the bigger contracts.  Within the previous 2 pieces written within this series we have noted and covered what is considered 2 of the leading challenges or reservations larger businesses have with respect to assigning bigger contracts to smaller app development companies.  These have involved the fact that (1) smaller app development companies often tend to be poor contract negotiators, and, while they may represent themselves as a capable and competent company, (2) larger companies have often discovered that many of these smaller companies do not have a “real” app development team.  But as previously illustrated, both of these challenges can be easily, efficiently, and effectively overcome, which in turn vastly improves your chances of getting bigger contracts.

     But then there is the final piece in this puzzle leading to bigger contracts, which is quite possibly the most compelling and common of the three:  Most small app development companies do not have the appropriate insurance coverage for the job.  Therefore, even if the client believes in your ability, they still would not be able to assign the contract to you because of the imminent, looming threat of possible liability.  But this too can be easily overcome within a few phone calls, emails, and a little free online research.

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Here’s the first challenge:  As you prepared to start your app development company, you may have spoken with a number of experienced, seasoned entrepreneurs and project managers to establish a clearer understanding as to the things that your company may need.  Much of this information may have been absolutely and undeniably awesome.  You understand the team members that you require.  You are educated on how to set up your company, how to register to get your employer identification number (EIN) for tax purposes, and you are familiar with the state government agency who can provide you with the appropriate business license.  You have considered office locations, sales and marketing strategies, and major and minor website and online advertising.  But in more cases than not, there is one subtle yet indescribably important point that is rarely, if ever, covered within these discussion.  That is the need for and the appropriate type of business insurance coverage.  That is why it sounded as if that larger company was suddenly speaking a foreign language when insurance information was requested.  But before you are able to secure many larger contracts, your company will require a certain amount of insurance coverage in order to be eligible for bigger contracts.

     One of the  biggest deterrents to getting insurance of any type tends to be the perceived exorbitant expense that most assume is associated with getting a policy.  When that large company begins to explain that your company is required to have no less than $2 million dollars of coverage for a project for example, many inexperienced app development entrepreneurs assume that the actual cost of the policy is somehow equal to the amount of desired coverage, which is absolutely false.  In fact, based on the size of the project, premiums for policies even with this amount of coverage tend to be quite reasonable let alone extremely necessary to protect your company from liability.

Your Insurance Coverage

Another very important point is that the amount of coverage your company requires may fluctuate based on the size and complexity of the contract or project.  In other words, where Coca Cola may require $2 million dollars of coverage, Disney may only require half of that amount in coverage based on your company’s contribution to the project.  Now, this information is not intended to give you license to “skimp” on insurance or the type of policy that you select.  But it is to help you to recognize that required coverage often changes from one project to the next.

     Many smaller app development companies will often attempt to disregard the threat of liability or lawsuits, which is a huge mistake.  Business can be a very litigious arena.  While you may be fairly confident in your own ability, for better or for worse, once you begin to manage a team of app developers you become increasingly more susceptible to the errors and affect of others, and this can ultimately be a lethal oversight for a young business of any type.  Business insurance coverage, in essence, helps to keep your doors from closing in the unfortunate instance of miscommunication within the ranks, a technical oversight or overshot, or outright professional neglect on the part of a contractor or partnering company.  This is why it should be as necessary for you and your company to have business insurance coverage as it is for the client.

     There are companies such as The Hartford who have departments that specialize in the field of business insurance coverage.  But 3 of the easiest ways to locate insurance companies for your business are (1) through referrals made by other professionals and entrepreneurs in the industry, (2) by contacting industry related associations and professional organizations, and (3) searching online.  You will find that there are literally hundreds to thousands of digital resources out there that can advise on insurance companies and consulting agencies for app development companies and projects specifically.

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Who Should You Call First

     Once you compile a few options, spend time researching the information on the websites and to contact the agencies to speak with a live person to explain your very specific and specialized needs.  Believe it or not, there are very few projects that you can introduce to the larger and  more reputable business insurance agencies that they will not be familiar with.  And, if need be, many of these companies are equipped with the resources to create specialized or proprietary and affordable policies seemingly on-the-fly.  But you want to use these channels to become more familiar with the language as well as to establish a better grasp of the expectations of many larger companies regarding larger contracts from an app development company.

     Do not be afraid that you may sound ignorant when you call or if you have questions.  If you were an insurance agent, you would not need to be calling in the first place.  Your inability to describe the exact type of coverage that you require is more common than you may believe.  The same applies where you may not instantly understand something being explained or described on a website.  Do not be afraid to say, “I don’t understand.”  Remember that it is the agent’s responsibility to help you to become more informed so that you can ultimately make a more intelligent decision regarding the policy and coverage that you require.  Allow these professionals to guide and to educate you.  In the end, you will always come out the better for it.  And when you finally meet with that company regarding that big contract, if you can show that this area regarding business insurance coverage is a part of the business that you are well-versed in, you will be amazed at the amount of instant credibility you gain.

Remember that these 3 reasons for why small app development companies often don’t get bigger contracts are referred to merely as “challenge” instead of “problems” for a very specific reason.  While “problems” sound like something that wraps around you like a second skin, the word “challenge” helps to infer that anything can be overcome with a little time, forethought, planning, and action.  Once you have instituted a solution in these areas, your company can very confidently walk into that large corporation and represent itself as an app development company that is prepared and fully capable of getting the job done efficiently and effectively.  In the process of learning to overcome these challenges, contract negotiations will become more fair and fluid, you will develop a team of app development professionals that you can rely upon, and you will suddenly be able to manage projects with the knowledge that you have taken the liberty to protect your company and your client from unexpected liability.  More than that, you are now able to run with the big dogs, and acquire bigger contracts.

About the Author

N. D. Brennan is a contributor to The Jordan Effect, the creative mind behind The Social Media Millionaire book series, and the author of 51 Successful Business Tips For Millennials. He is also the author of the anti-American history tale, which draws an answer to an unprecedented answer to an unimaginable question: "What if white people were slaves?" 51 Successful Business Tips For Millennials is scheduled to be released this month. Reciprocal is available as an eBook at, and in paperback at Kindle Direct. To contact the writer directly, send your emails to