Earlier quoted context omitted.
So insurance did not offer much before the CRA. They will probably develop this market but it is gonna cost a lot probably and will be complex and imperfect. Of course an LLC ultimately protect you but you have just multiplied by 10 or 100 the risk of blowing up your livelihood and the one of your employees. Those regulations are just a nightmare, with "no-fault" liability, a simplified the burden of proof for the cl…
Have you talked to an insurer? Business insurance requires a customized quote. You didn't really answer the question. Do you have a specific risk in mind, or are you only worried about the risk of a random fuckup which all businesses face?
Every software you provide have to be secure and if not you are liable for damage. So this is not just a random f-up, and we know how hard security really is in practice.
I also know that when you are a provider of a software most vulnerabilities and risks are usually requested/created by the client who usually exercise pressure on you (especially if you are a small actor). It is often done in a sneaky manner, putting the provider in an impossible situation. You will need to document this the best you can because now you are liable big time.
EDIT: What I mean is I understand they did that to force big manufacturers of IoT device to care more about security. But if you are now a small provider setting up some customized software you fall under the same rules.