IT company insurance in Ukraine is still relatively uncommon , but its importance is rapidly growing, especially for businesses working with foreign clients, sometimes in their own international representative offices. International partners place significant emphasis on risk management and require service providers to have appropriate insurance policies.
In 2024, the number of major cyberattacks reached 1,659 cases, highlighting the continuous rise in digital threats. By 2025, global cybersecurity expenditures are projected to reach $212 billion, representing a 15.1% increase compared to 2024.
IT insurance and risk factors for IT companies
Several key risk categories in the IT industry require insurance coverage:
- Group 1 – Professional Errors and Developer Misconduct. This category includes mistakes or omissions by developers or management. If an error causes financial losses to a client or end-users, the affected party can file a claim or sue the responsible entity. In many cases, legal fees and settlement costs far exceed the initial contract fee paid to the developer.
- Group 2 – Cyber Extortion, Hacking, and Employee Misconduct. This includes ransomware attacks, hacker breaches, malware incidents, or fraudulent employee actions. If a company’s code, database, or sensitive assets are stolen, it results in ransom demands, financial losses, or operational disruptions. Claims related to negligence or criminal activities by employees working projects also fall under this category.
- Group 3 – Business Interruption or Project Delays. Every outsourcing IT company faces project delays or workflow interruptions. While contracts often specify a development timeframe, there is always a “bus factor” risk, where key team members leaving a project could lead to contract breaches, legal disputes, and financial penalties.
- Group 4 – Intellectual Property, Privacy, and Confidentiality Violations. This includes cases of phishing attacks, data leaks, and unintentional breaches of confidential or private information discovered during project development. Such violations often lead to legal claims and financial penalties for unauthorized disclosure.
- Group 5 – Electronic Equipment Insurance. This covers hardware damage caused by hacking, physical damage, short circuits, or other electronic failures.
Lack of liability insurance in IT: what are the costs?
All IT company risks come with associated expenses, which may arise from legal claims or lawsuits filed by clients or partners:
- Legal defense costs include court fees, legal representation, expert evaluations, translation services, and other litigation expenses. Since most lawsuits are filed by foreign clients, legal proceedings often take place abroad, requiring significant financial resources
- Incident investigation expenses: costs related to examining the circumstances of a claim
- Public relations management: maintaining a positive reputation among clients and partners after an incident
- Data recovery costs: if critical data is lost due to a professional error, restoring it can be costly
- Other settlement expenses: addressing professional liability claims to resolve disputes
The cost of legal claims can exceed the total project budget, leading to severe financial and reputational risks for an IT company.
