How much does insurance cost for a data scientist business?

Data scientists pay an average of $65 per month, or $785 annually, for tech E&O insurance. This policy bundles errors and omissions insurance with cyber insurance at a lower cost than buying the policies separately.

Errors and omissions insurance, also known as professional liability insurance, provides financial protection against claims of professional negligence.

For example, if you provide recommendations based on the wrong machine learning algorithms and those recommendations cause your client a financial loss, you could find yourself facing a lawsuit.

Tech E&O adds third-party cyber insurance to this coverage, which extends protection in case a vulnerability in your data science services leads to a data breach or cyberattack at a client's business.

This is the average E&O insurance for data scientists who buy from Insureon:

Insurance premium: $65 per month
Policy limits: $1 million per occurrence; $1 million aggregate
Deductible: $2,500

The cost of errors and omissions insurance depends on factors such as the coverage limits you choose, the size of your business, and the type of data you work on.

Data scientists pay an average of $164 per month, or $1,964 per year, for cyber insurance. This policy is vital for data science startups that store personal information, such as customers' credit card numbers, Social Security numbers, or email addresses.

Cyber insurance covers the cost of complying with your state's data breach laws after a cyber incident. It can pay for legal fees, customer notification costs, and other expenses related to a data breach or cyberattack. You may also see this policy referred to as cyber liability insurance or cybersecurity insurance.

The cost of cyber insurance primarily depends on the amount of personal information handled by your data science company.

Data science contractors and businesses pay an average of $30 per month, or $363 per year, for general liability insurance.

This policy helps pay for legal defense costs from accidents that damage a client's property or cause a bodily injury. It also covers lawsuits related to slander and libel, such as a claim that an employee at your data science agency made a derogatory statement about a competitor on social media.

This is the average general liability insurance policy for data scientists who buy from Insureon:

Premium: $30 per month
Policy limits: $1 million per occurrence; $2 million aggregate
Deductible: $500

Insureon’s licensed agents typically recommend a business owner’s policy (BOP), which combines general liability insurance with commercial property insurance at a discount to protect your computers and other business property.

For data scientists, the average premium for a business owner's policy is $46 per month or $546 per year. You can also add business interruption insurance to protect against financial losses from a forced closure due to a fire or storm.

The cost of general liability insurance depends on factors such as the coverage limits you choose, the size of your business, the amount of foot traffic, and any subcontractors or additional insured endorsements. Learn more about how your premium is calculated.

The average cost of a fidelity bond is $110 per month for data scientists, or $1,316 annually. Some clients, especially in the financial services industry, may require a bond before they will work with your data science business.

Fidelity bonds reimburse your client if one of your employees commits fraud, theft, or forgery, including illegal electronic funds transfer. This amount must be paid back to the company that issued the bond.

The cost of a fidelity bond is typically a small percentage of the bond amount.

Data scientists pay an average of $33 per month or $399 annually for workers' compensation insurance. This policy covers medical expenses and disability benefits when you or an employee suffers a work-related injury or illness.

Data science companies that have employees typically must purchase workers' comp to comply with state requirements and avoid penalties. It's also recommended for sole proprietors, as health insurance plans can deny claims for injuries related to your job.

Most policies include employer's liability insurance, which covers the cost of lawsuits related to workplace injuries.

The cost of workers' comp depends on the number of employees and their occupational risks, among other factors.

Data science contractors and companies pay an average of $190 per month, or $2,282 per year, for commercial auto insurance. This policy can pay for property damage and medical bills in an accident involving your company vehicle. It can also cover vehicle theft, vandalism, and weather damage.

Most states require this type of insurance for vehicles owned by an data science business. For personal, rented, and leased vehicles used for work purposes, look to hired and non-owned auto insurance (HNOA) instead.

The cost of commercial car insurance depends on several factors, including the policy limits you choose, coverage options, the number and value of your vehicles, and the driving records of anyone permitted to drive.