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Startup to Offer Open Source Insurance

michael posted more than 10 years ago | from the throw-your-money-away dept.

Linux Business 268

ThePretender writes "From the Infoworld article, 'Open Source Risk Management LLC (OSRM), a startup company that last month hired Pamela Jones, editor of the popular Groklaw.net Web site, as director of litigation risk research, plans to soon begin offering insurance policies to companies using open source software but fear that they may be sued, according to a company spokeswoman'. What's next - Developers having to pick up 'code malpractice' insurance? Egads." Might as well get some alien abduction insurance while you're at it.

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Malpractice Insurance (5, Informative)

Shakrai (717556) | more than 10 years ago | (#8581128)

What's next - Developers having to pick up 'code malpractice' insurance? Egads.

They already have it. The agency I work for has several carriers that will write a malpractice (officially called "Professional Liability") policy for computer nerds. The standard one that I've seen provides a million dollars of coverage in the event that you screw up and cause something like data loss or the like. The policy itself is pretty broadly worded and could cover everything from bugs in a program you wrote to a general mistake of stupidity dealing with media. As I recall they start at about $1,200+ a year depending on the type of business and the people involved.

All insurance really does is protect you from losses that you couldn't (or don't want to) afford. The comment from the summary sounds sarcastic (as well as the "throw-your-money-away dept." tagline) but in reality in this sue happy world these types of policies are not a bad idea. Do you want to lose your business and livelihood over an honest mistake and some sue happy customer? A few hundred or thousand bucks for peace of mind is a small price to pay in this day and age.

The HATE WINDOWS Campaign! (-1, Offtopic)

Anonymous Coward | more than 10 years ago | (#8581144)

windows (452268) [slashdot.org] is hated by no one?!

It is your duty as a Slashdot reader to officially and formally hate windows. [slashdot.org] Slashdot is impure until windows' freaks outnumber it's fans! Strike down this vile evil corporate monster today! Show it how much you hate it. Do Slashdot a favor and bloat windows' freaks [slashdot.org] list!

UPDATE! WE GOT MODDED UP!

Our founder, users.pl [slashdot.org] , got modded up to zero [slashdot.org] in one of his "Windows is hated by no one?!" posts in a Mac article! He was modded back to -1 in short order, but make sure you metamod that "insightful" as fair, or the "troll" as unfair! Mac users have fought back! Mac users have made it clear. Windows must be hated! [slashdot.org]

Waves of people have already joined our cause [slashdot.org] . Every Slashdot account counts!

Re:Malpractice Insurance (2, Interesting)

Zorak Man (732141) | more than 10 years ago | (#8581206)

I'm no legal expert, but couldn't all of this be avoided with a proper disclaimer in the licence for the software?

Re:Malpractice Insurance (5, Informative)

Shakrai (717556) | more than 10 years ago | (#8581260)

I'm no legal expert, but couldn't all of this be avoided with a proper disclaimer in the licence for the software?

And in theory you can prevent people from suing you if you put up a "Beware of Dog" sign or a "Private Property" sign. In reality you'll always find some clever lawyer or easily-swayed jury that rules the other way.

Are you going to trust the future of your business and life to a disclaimer?

Re:Malpractice Insurance (2, Insightful)

Decameron81 (628548) | more than 10 years ago | (#8581447)

No, that's wrong. You can never stop people from suing you. By placing a "beware of dog" sign, you are making sure that people will know there's a dog before doing something stupid like sticking their arms in. In other words if the sign is there and someone sues you because your dog bite him, you are probably going to win, but if the sign was there, you would probably be found guilty.

A disclaimer is no different. You are just letting people know about the degree of support you are offering to them before they start using your product, and what they can or can't do. They can still sue you, but at least you can prove that they knew your conditions before using your program.

Diego Rey

Re:Malpractice Insurance (5, Insightful)

kfg (145172) | more than 10 years ago | (#8581488)

In reality you'll always find some clever lawyer or easily-swayed jury that rules the other way.

Without even going that far, the act of being sued can be devastating, even if you just fight for a year and then they back off and it never really goes to trial.

Let's say a hundred bucks or so every time your lawyer picks up the phone. Several hundred for a letter. A grand for a simple motion. A couple months of just futzin' around and the legal bills can add up in a hurry.

I know of a judge who treats every petty charge as if it were a federal case. Really comes down hard on everyone, right down to a simple parking violation. And yet if you look at his conviction records they're no different than average.

When asked what gives he said, " I make them have to get a lawyer. Now that is punishment."

It isn't usually losing a suit that hurts. It's simply being involved in one. You have to get a lawyer. And anyone can sue you over damned near anything.

KFG

Re:Malpractice Insurance (3, Informative)

ChuyMatt (318775) | more than 10 years ago | (#8581231)

This is not a sue happy world. America has an absurd amount of lawyers per capita v. all other countries. We also have more lawsuits than any other people.

Re:Malpractice Insurance (0)

Anonymous Coward | more than 10 years ago | (#8581424)

We also have a constitution that guarantees certain rights and we have people trying to take those rights away all the time. So we need lawyers to make sure those people don't succeed.

Re:Malpractice Insurance (2, Interesting)

Dan512 (152670) | more than 10 years ago | (#8581276)


There was a requirement for "Errors and Omissions Insurance" for a utility company gig I worked in 1998. It was $1100.

Starting my own insurance company (3, Funny)

Atario (673917) | more than 10 years ago | (#8581304)

I'll insure anyone who wants to send me $1000 per year against catastrophic meteorite impact leading to the destruction of all civilization.

Wouldn't you pay for that peace of mind? Think about it, won't you? Thank you.

Re:Malpractice Insurance (1)

brulman (183184) | more than 10 years ago | (#8581349)

in my experience (AM/FM GIS industry) a software consulting firm typically can't even bid a job without certification of insurance. I don't know how it is in other insutries however, but it is normal practice for large utility corporations.

In case you didn't get the acronyms (0, Offtopic)

dillon_rinker (17944) | more than 10 years ago | (#8581417)

AM = Ante Meridian
FM = Field Manual
GIS = Google Image Search

Re:Malpractice Insurance (1)

Futaba-chan (541818) | more than 10 years ago | (#8581472)

$1200 per year? Zow! I'm starting a job in Canada, and they're bringing me in as a contractor at first for immigration purposes, and I'm on the hook for a million loonies worth of liability, too. But in Canada, a million dollar liability policy runs about $150 CDN per year....

Re:Malpractice Insurance (1, Informative)

Anonymous Coward | more than 10 years ago | (#8581480)

I just got $1 million in product liability, as well as an umbrella policy for my business-related property, from a major carrier for $532 a year. Definitely a worthwhile investment, IMO.

code-malpractice (2, Informative)

mod_critical (699118) | more than 10 years ago | (#8581134)

What's next - Developers having to pick up 'code malpractice' insurance?

I am in consulting and guess what, insurance to protect me in case of a damage causing programming error starts at over $2,000 a year! And for good reason, imagine you write something that rounds up instead of down in the hundredths place for some output from a data generatng monte carlo. It could go unnoticed for months, and then tens of millions of records in a database could need to be checked and recalculated. That would be HUGE $$$.

Re:code-malpractice (1, Informative)

tomhudson (43916) | more than 10 years ago | (#8581285)

If you're doing monte carlo simulations, you already know that they're just simulations, and you should have already made a customized rounding function.

You also know that simulations are not real life, and there WILL be differences.

Checking tens of millions of records is not much more expensive than checking 1 record. The expense is writing and verifying the query.

If you're using monte carlo, you already know that there is no such thing as true randomness in deterministic systems, and computers are deterministic systems. Any output is going to be skewed somewhere, probably well before the 100th decimal place.

Re:code-malpractice (1)

dillon_rinker (17944) | more than 10 years ago | (#8581514)

...well before the 100th decimal place.

That was "hundredths place." As in "0.03 is equivalent to three hundredths." That's the second decimal place.

Re:code-malpractice (0)

Anonymous Coward | more than 10 years ago | (#8581294)

Maybe if you have a bad DBA...

I've got your startup (-1, Offtopic)

Anonymous Coward | more than 10 years ago | (#8581147)

Right here!!!

(FP)

I GOTS FRIST POZST INSURMANCE! (-1, Offtopic)

Anonymous Coward | more than 10 years ago | (#8581149)

Como esta? El yay! Seriously, would someone please insure my teabag fgor $699? I'd appreciate it.

Not former. Current. (2, Informative)

Anonymous Coward | more than 10 years ago | (#8581150)

she's not former.
and fp, I think?

GO TO HELL NIGGER TACO (-1, Offtopic)

Anonymous Coward | more than 10 years ago | (#8581151)

I touched my junk liberally. I strapped me in to my 1986 Pontiac Fiero GT and I couldnt keep my offensive hands off of myself. I was performing many red flag touches. I couldnt believe what the fuck was going on. I told myself the city would not approve of me pleasuring myself in public. Can you believe it? I did all this. I picked myself off the street, strapped my arms and legs down in my 1986 Pontiac Fiero GT's passenger seat, and I just wouldn't stop fondling my cock'n'balls. They definately were red flag touches. the goddamn referee I had in the back seat kept on raising up this red flag every time I touched my junk but did I care? NO WAY! I just kept on doing it. I couldn't believe what the fuck was going on, indeed. I pleaded with myself but to no avail. I told him the city would not approve of me touching an myself like me without at least letting the mayor in on it for the use of my body as his own personal plaything. This got to me, worrying about my image. I continued to fondle myslef, all the while ignoring the referee's red flags. Then I drove the 1986 Pontiac Fiero GT to my house and *ejected the seat I was in*! It was amazing. But surprisingly, after I woke up the next morning, my bank account had $1000k more in it because I cashed my paycheck! Can you believe it?

Go back to troll school! (0)

Anonymous Coward | more than 10 years ago | (#8581371)

Your lack of formatting makes baby Jesus' eyes bleed.

imagine... (-1)

grayshade (747479) | more than 10 years ago | (#8581152)

imagine a beowulf cluster of litigations!!! (mod me down)

That alien abduction insurance (5, Funny)

Anonymous Coward | more than 10 years ago | (#8581156)

Is very handy... especially the double payout for anal probing.

Re:That alien abduction insurance (3, Funny)

Patrik_AKA_RedX (624423) | more than 10 years ago | (#8581413)

Anal probing? Last time I was abducted by aliens, all I got was this lousy T-shirt.

"former editor"? (2, Informative)

Anonymous Coward | more than 10 years ago | (#8581162)

I thought she still heads groklaw...

Re:"former editor"? (5, Informative)

trick-knee (645386) | more than 10 years ago | (#8581218)

> I thought she still heads groklaw...

as of Tue Mar 16 12:41:33 MST 2004 she hasn't made any announcement to the contrary...

Xtreme! (-1, Troll)

emo boy (586277) | more than 10 years ago | (#8581163)

Xtreme [sfgate.com]

Re:Xtreme! (0)

Anonymous Coward | more than 10 years ago | (#8581395)

"Marcus Wesson enjoyed the tranquility of his sailboat in Santa Cruz harbor."

Indeed.

Maybe if Marcus hadn't spent so much time enjoying the tranquility of his sailboat he'd have a bigger kill record. Slackmeister.

Eye Strain Insurance (5, Funny)

richarst1414 (584975) | more than 10 years ago | (#8581166)

I hope they start offering eye strain insurance soon because of all of the SCO related articles.

Re:Eye Strain Insurance (0)

Anonymous Coward | more than 10 years ago | (#8581205)

More like sore belly muscle insurance :D

'code malpractice' insurance (3, Informative)

Anonymous Coward | more than 10 years ago | (#8581174)

What's next - Developers having to pick up 'code malpractice' insurance? Egads.

It's called Errors and Omissions insurance.

Job Security? (2, Interesting)

shystershep (643874) | more than 10 years ago | (#8581175)

Doesn't sound like a place I'd want to work. What happens when SCO gets swept back under the rug? I realize that some businesses may want the security of having this, but I would think that a more general insurer would be able to take care of that. This seems way too specialized for a niche that I'm not convinced exists, or, if it does, that will last.

Re:Job Security? (1)

The Blue Meanie (223473) | more than 10 years ago | (#8581326)

What happens when SCO gets swept back under the rug?

What happens is Microsoft open their warchest and throws funds at some new chowderhead to have them come forward and start making life suck for people using (or thinking about using) Linux.

Re:Job Security? (0)

zurab (188064) | more than 10 years ago | (#8581445)

Doesn't sound like a place I'd want to work. What happens when SCO gets swept back under the rug?

Not only that, my guess is this may reflect badly on groklaw website as well. I mean I understand Pamela Jones was offered a job and she took it but, come on... it's like they are saying don't give your money to SCO and others that may come up with bogus claims, just give your money to us instead! What kind of legal principle do they have in mind for "user" insurance?

What's next - Developers having to pick up 'code malpractice' insurance?

This should read: what's next - shoppers have to pick up indemnification insurance for products they buy at supermarkets?

I mean, what if I buy a bottle of Pepsi, and then Coke sues Pepsi for some patent/trademark/contract violation - can they go after me as well as a "user"? What if I buy McDonalds and Burger King ends up suing them? Do I need insurance for Quarter Pounder with cheese as well?

This is all nonsense.

Why? (0, Flamebait)

Anonymous Coward | more than 10 years ago | (#8581177)

What's next - Developers having to pick up 'code malpractice' insurance?

Oh, wait a minute, isn't open source software supposed to be pewrfect and free of bugs because of the peer review? And no one ever hacked into a Linux server? And no one ever had a Linux workstation hang up? And there are no bugs in open source applications? And everything works as promised?

In this case, what are you afraid of when the customer asks you for malpractice insurance?

alien abduction insurance? (5, Funny)

morcheeba (260908) | more than 10 years ago | (#8581179)

Sure, I guess it makes sense because there have been more documented cases of alien abuductions than documented copied lines of UNIX.

Re:alien abduction insurance? (0)

Anonymous Coward | more than 10 years ago | (#8581269)

You're comparing the number of alien abductions with the number of copied line of UNIX? Apples and oranges. Losing the ability to sit on anything other than a toilet bowl for a lifetime is much worse than one copied line of code, trust me.

Well... (1)

TWX (665546) | more than 10 years ago | (#8581187)

...it's nice to see that Ms. Jones is seeing some kind of financial benefit indirectly from her assistance to the community at large. Hopefully this doesn't turn into the sham that it sounds like it's destined for, unfortuntely.

How about software life insurance? (4, Funny)

Anonymous Coward | more than 10 years ago | (#8581189)

I mean, in case *BSD dies or something like that.

Unfortunately (0)

Anonymous Coward | more than 10 years ago | (#8581468)

the only beneficiary for *BSD's life insurance was Stephen King, and I just heard on talk radio something happened to him...

Pushing out small fish? (3, Insightful)

fembots (753724) | more than 10 years ago | (#8581196)

Unless the insurance premium is kept low - it could be low now, but we only need a couple of alligation to push up the premium - eventually, only big development houses can afford such insurance, and what are part-time freelance developers going to do?

The main problem is, when you have such 'standard protection' for malpractice, consumers want to see that you're insured.

It's a good idea (4, Insightful)

stratjakt (596332) | more than 10 years ago | (#8581197)

Forget Linux vs SCO and who's right or wrong..

Look at the broader picture. All that stuff out there on sourceforge. Someone in some cubicle at some business decides some obscure project is useful, and starts using it.

But, that project is illegal. It's stolen code, violating patents and copyrights.

It's that kind of a bullshit legal snare that could send a young business into chapter 11.

If MS or Apple or Adobe stole code for their products, they'd be on the hook for using that stolen code for profit.

If the code was open source though, who do you go after? The people profiting from it - the end user.

Makes absolute sense. In fact, it was the lack of this sort of protection that has kept the company I work for away from OSS. Perhaps I could sway them now.

Re:It's a good idea (4, Interesting)

John Hasler (414242) | more than 10 years ago | (#8581336)

> Look at the broader picture. All that stuff out
> there on sourceforge. Someone in some cubicle at
> some business decides some obscure project is
> useful, and starts using it.

What bearing does that have on buying Free Software from a respectable company such as Red Hat or IBM?

> If the code was open source though, who do you
> go after?

Whoever made and distributed the unauthorized copies.

> The people profiting from it - the end user.

The end user is not liable unless he can be proven to have known about the copyright infringement in advance. Copyright regulates copying, not use.

> Makes absolute sense. In fact, it was the lack
> of this sort of protection that has kept the
> company I work for away from OSS.

Silly. The risk is exactly the same for closed-source.

Re:It's a good idea (1)

nomadic (141991) | more than 10 years ago | (#8581382)

What bearing does that have on buying Free Software from a respectable company such as Red Hat or IBM?

Huh? What bearing does that have on the parent's point? You're saying you won't need insurance if you only buy from two vendors?

Silly. The risk is exactly the same for closed-source.

You seem to be jumping to the conclusion that the insurance doesn't already exist for closed-source, and the story is saying ONLY open-source software use benefits from insurance. Why would you jump to this conclusion?

Re:It's a good idea (2, Insightful)

DjReagan (143826) | more than 10 years ago | (#8581399)

However, the end user *is* liable for patent infringement.

Re:It's a good idea (2, Insightful)

tornado2258 (627232) | more than 10 years ago | (#8581446)

You are in no way responsible for the use of code that someone else has stolen. If I steal some code from a company and then put it on the net and you use it, the company I stole it from can go after me and possibly people who were making and distributing CDs with this code on (I think only if they could prove that they knew the code was stolen and kept on distributing) but they can't go after you unless you continue to use the code after they have notified you it was stolen (and I think even that one would need a damn good lawyer to make it stick). The P2P situation has confused everyone about this somewhat because everyone is sharing copyrighted stuff and so everyone involved (unless you only download) can be persued legally.

Former Editor? (-1, Redundant)

Anonymous Coward | more than 10 years ago | (#8581198)

When did that happen?

Former Editor? (3, Informative)

PopeJP3 (714468) | more than 10 years ago | (#8581207)

I thought PJ was still the editor of GrokLaw. Who's in charge now?

Re:Former Editor? (3, Redundant)

One Louder (595430) | more than 10 years ago | (#8581243)

This appears to be a mistake in the article - she is *still* the operator/editor of Groklaw in addition to her new position.

And Microsoft Insurance .... (1, Funny)

Mansing (42708) | more than 10 years ago | (#8581208)

.... costs four times as much. I can't imagine why .....

Excellent news for open source (3, Insightful)

murr (214674) | more than 10 years ago | (#8581210)

I disagree with the sarcasm expressed in the article. Such an insurance makes perfect sense for getting risk averse companies to use open source software.

Up to now, the alternatives were:
  • Pay $$$$$$ for commercial software and have a vendor you can sue if things go wrong.
  • Get open source software and be on your own when things go wrong.

by buying this insurance, the risk averse company hedges their risk, while still presumably getting a better deal on their software. It's open source capitalism at its finest.

Re:Excellent news for open source (2, Insightful)

tomhudson (43916) | more than 10 years ago | (#8581374)

Not really. Software insurance doesn't fix any of the bugs that may be encountered, and shit^H^H^H^Hbugs happen. Your customer won't really benefit either. If they had a choice, they'd rather have less buggy code, than have a loss that they have to claim against. So they get some $$$ off your insurer. It still has to be fixed. Who are they gonna call? You? No, they've put you out of business, since now you can no longer get insurance. So they have to call someone who doesn't understand the code to fix it. Sounds like a recipe for disaster and more claims.

Re:Excellent news for open source (0)

Anonymous Coward | more than 10 years ago | (#8581420)

What do people do who pay $$$$ for commercial, open-source software from RedHat or IBM do? Can they sue the vendor because it's commercial or are they forbidden from suing their vendor because it's open source?

Who wins ties? Oh wait--maybe you're wrong! Maybe you have the same (in)ability to sue software vendors regardless of whether the software they sell you is open source!

Coder malpractice? (-1, Offtopic)

Anonymous Coward | more than 10 years ago | (#8581217)

Can I sue the Slashcode [slashcode.com] people for pain and suffering of my web browser? ;)

She's not a former editor! (4, Informative)

m0nkyman (7101) | more than 10 years ago | (#8581219)

Pamela Jones is still the main contributor and editor for Groklaw.

Check your facts.

Re:She's not a former editor yet! (1, Insightful)

Vlad_the_Inhaler (32958) | more than 10 years ago | (#8581329)

Given she now has a good job which will be taking a lot of her time and which should be paying real money, she probably won't be for much longer.
How much mileage has the SCO story got left anyway? A good time to get out :-)

Re:She's not a former editor yet! (1)

DjReagan (143826) | more than 10 years ago | (#8581431)

She previously had a good job which was taking her time and paying her money. Why should this new job suddenly make her stop working on Groklaw?

Re:She's not a former editor yet! (4, Informative)

h00pla (532294) | more than 10 years ago | (#8581464)

I believe she's stated many times that when the SCO case blows over (and SCO blows up and McBride and Co. dry up and blow away) she wanted the site to evolve into a forum for open source and free software legal issues. As far as getting out, I don't think she's ever said that.

Nothing new (4, Funny)

Ralph Yarro (704772) | more than 10 years ago | (#8581223)

There's a company that already offers insurance against just these risks, for a one time price of only $699!

Re:Nothing new (1)

deego (587575) | more than 10 years ago | (#8581333)

Yeah, where's SCO news gone to lately on slashdot? I miss my daily fix...

What about closed source companies? (4, Interesting)

AndroidCat (229562) | more than 10 years ago | (#8581226)

Why just open source companies? If Microsoft screws up, they're not exactly going to be backing you up if you delivered a product using their software. (In the EULA, their liability is usually limited to what you paid for their software or $10.)

This sounds like a company that's gone parasitic on FUD.

Re:What about closed source companies? (0)

Anonymous Coward | more than 10 years ago | (#8581292)

They have insurance for such things as it is now. I know of a software company (small) that was paying upwards of $10,000 a year for insurance for there software, part of the reason for the high bill was there software was entreprise class, and it was to run on (wait for it) WINDOWS!

Yet another thing to come out of the.... (0)

Anonymous Coward | more than 10 years ago | (#8581244)

SCO fiasco would be some miserable Insurance sceme.

Plus they would probably have some sort of statement like:
IF ( Suit == IPLAW ) {
You == Not covered;
}

It's not paranoia... (2, Insightful)

steveha (103154) | more than 10 years ago | (#8581248)

...when they really are out to get you.

You have SCO, planning to sue everyone on the face of the Earth until they can collect a "license fee" on every *NIX system, including Linux and BSD. You have patents being granted on new inventions like "use the Internet to sell things". And you have vendors of proprietary software becoming increasingly nervous about the competition from free software; they might decide to play the lawsuit card.

It's not unthinkable that a company would sue end-users directly to "make an example" out of them; SCO already did just that, to AutoZone and DaimlerChrysler.

There are legal threats out there. Insurance against them isn't silly.

steveha

Legal extortion (1)

sleepingsquirrel (587025) | more than 10 years ago | (#8581249)

Hardly a day goes by that there isn't a story on /. about some company using the legal system as a legal extortion scheme. This sounds like a step in the right direction, although I want it to cover any lawsuit, not just open source libality. If companies knew that they had a real fight comming, they might not be so sue happy. I'd like to see a $300,000 policy which covers just the litigation costs (not damages if you lose) and has about a $5-10,000 deductible. Oh, and I want the premium to be about $250/year. Why don't organizaions like the FSF or the EFF try to offer a service like this to their members?

Re:Legal extortion (1)

Shakrai (717556) | more than 10 years ago | (#8581393)

If companies knew that they had a real fight comming, they might not be so sue happy. I'd like to see a $300,000 policy which covers just the litigation costs (not damages if you lose) and has about a $5-10,000 deductible.

Virtually all kinds of liability coverage include your legal defense. If you get sued for a million bucks your insurance company is going to defend you to the utmost -- and they typically have better lawyers then you or I have access to.

The problem occurs when some ambulance chasing asshole sues you for a few thousand bucks (perhaps all the way up to $10,000). Your insurance company might stonewall them for awhile but eventually they will usually settle. It's cheaper for them to write off this small claim then it would be to litigate it. This feeds a vicious circle of ambulance chasing scumbags and higher rates for all of us.

The idea of coverage that only includes your litigation is an interesting one. But I still think they'd wire in some sort of clause that they would reserve the right to settle it. No insurance company that I know of is going to spend $100,000 defending a lawsuit when they can settle it for $10,000.

Sometimes I wish the insurance industry would adopt the attitude that the tobacco companies (used to anyway) have about lawsuits. They would refuse to settle any case and would appeal even the smallest damage amounts to avoid setting a precedent. If insurance companies did this we'd all suffer with higher premiums for awhile -- but eventually the ambulance chasers would give up and in theory we'd all have lower rates to thank for it.

Why Price Might be High/Low (2, Interesting)

4of12 (97621) | more than 10 years ago | (#8581252)


I'd be interested in what price this insurance sells for.

On the one hand, I would expect it to be cheap inasmuch as many of the legal attacks so far appear to be without merit.

OTOH, with only a small number of underwriters willing to write policies, they could charge interested customers what the market will bear with few suppliers.

And, in some cases, customers may feel that they're getting so much value from their open source software deployments that they'd be willing to pay more than some might expect.

Will they indemnify us against SCO? (4, Interesting)

djh101010 (656795) | more than 10 years ago | (#8581258)

The company I work for got "the letter" from SCO, and we have now had a second linux-based project shot down due to SCO's FUD working. This is frustrating, to say the least, when the appropriate technical situation is being held hostage by SCO.

If we could buy insurance against the near-zero chance that SCO could be successful, we might be able to get these projects going in the direction that makes technical sense, and stop worrying about (insert rant about McBride and company here).

Re:Will they indemnify us against SCO? (1)

fembots (753724) | more than 10 years ago | (#8581301)

If it is like most insurance, it probably won't cover existing illness and conditions.

Anyway, the article said SCO believes that its $699 per processor Intellectual Property License for Linux, however, is a better idea. "Ours is certainly the most reasonable way to go and certainly the safest way to go," said SCO spokesman Blake Stowell.

Which probably means this insurance premium mustn't be too expensive.

Re:Will they indemnify us against SCO? (1)

djh101010 (656795) | more than 10 years ago | (#8581425)

So, would SCO fall under "illness" or "preexisting condition" in this context? I'm looking forward to not having techical decisions obstructed by a noisemaker with no facts.

Woo Hoo! (2, Funny)

Anonymous Coward | more than 10 years ago | (#8581268)

I just saved a bundle on my Linux insurance!

Re:Woo Hoo! (0)

Anonymous Coward | more than 10 years ago | (#8581438)

Was that because you switched to GEICO, err, i mean GEEK-O?

Congratulations, Spain! (-1, Offtopic)

Anonymous Coward | more than 10 years ago | (#8581270)

You just gave Al Qaeda their first political victory. Way to go!

Re:Congratulations, Spain! (-1, Offtopic)

Anonymous Coward | more than 10 years ago | (#8581361)

Thanks Bush! You just gave Al Qaeda its next goal!

Re:Congratulations, Spain! (-1, Offtopic)

Anonymous Coward | more than 10 years ago | (#8581385)

Iraq was their first political victory.

Programmers' malpractice? (5, Informative)

PCM2 (4486) | more than 10 years ago | (#8581280)

What's next - Developers having to pick up 'code malpractice' insurance?
Sounds great to me. Every place I've ever done contract programming for has a clause in their contract that basically says, "If somebody sues us, they sue you." Some of them are nicer about it, and pretty much just require you to appear in court if there's ever a problem. Others want you named as a defendant. Saying "don't screw up" wouldn't make me feel as comforted as a good insurance policy -- if such a thing exists?

Malpractice == good! (1)

FortKnox (169099) | more than 10 years ago | (#8581290)

What's next - Developers having to pick up 'code malpractice' insurance? Egads

That's good. It'll help in the fight of outsourcing. You get what you pay for... remember that ;-)

I've got some good news! (2, Funny)

stratjakt (596332) | more than 10 years ago | (#8581307)

I just saved a load of money on my linux insurance by switching to UnixWare!

Re: Alien Abduction Insurance (1, Funny)

tomhudson (43916) | more than 10 years ago | (#8581314)

One of my buddies was startled to see his ex-wife on TV claiming that she had been abducted by aliens (including being "probed").

When he told me this, I told him that he should stop paying child support, until testing proves the kids aren't alien spawn. We all got a good laugh out of it.

Good alternative to SCO license (4, Interesting)

weopenlatest (748393) | more than 10 years ago | (#8581317)

I don't see why there is such a negative response to this post. I would bet that many if not most of the companies who paid SCO licensing fees would have opted for this deal instead, had it been available, leaving SCO with a lot less money for frivolous lawsuits. In fact, it wouldn't just take money away from SCO--it would give it to the other side. Any company offering open source insurance would have a huge financial interest in fighting a company like SCO, giving the open source movement some much need legal muscle. If insurance like this got more popular, it could seriously weaken SCO's business model.

Bad incentive structure (4, Insightful)

Phat_Tony (661117) | more than 10 years ago | (#8581335)

Is it just me, or is anyone else worried about the incentive structure this sets up?

I mean, now an unscrupulous open source developer could intentionally insert some blatantly stolen code, claiming it's their own; some in-cahoots business with a copyright on the code can take everyone to court; the insurance will have to pay out big time, and the company slips a million to the asshole developer under the table.

The Open Source movement gets a bunch of bad PR, the code needs an emergency re-write, some scoundrels make a killing, and the insurance company rethinks its business model.

I know insurance investigators can go about investigating and trying to stop this from happening, but it seems like a very hard thing to prove, as along as the payment to the programmer is channeled very secretly.

Re:Bad incentive structure (1)

skywolf (757605) | more than 10 years ago | (#8581452)

In a fair world, the developer who inserted the copied code would be liable for all the damages, and the end user would be liable for none of them.

I know the world often isn't fair...

Making a baby in my baby! (-1, Offtopic)

Anonymous Coward | more than 10 years ago | (#8581343)

Making a baby in my mommy!

Good marketing but for the wrong reason (1)

SenFo (761716) | more than 10 years ago | (#8581364)

People bought Y2K insurance. It's a scam, sure, but it makes them money.

Microsoft Insurance (1)

IO ERROR (128968) | more than 10 years ago | (#8581365)

Where's the insurance to protect your company from damages incurred from using Microsoft products?

What's wrong with this? (1)

Cainam (10838) | more than 10 years ago | (#8581377)

I think it's great that there's someone willing to stand by Open Source and offer this kind of indemnity. This is a Good Thing. More support for FLOSS is more support for FLOSS.

How about vendor bankruptcy insurance? (2, Interesting)

Animats (122034) | more than 10 years ago | (#8581381)

As a business decision, it now looks dangerous to buy an SCO-licensed product. Where's your protection if SCO goes under? Do you have source code? Do you have source code escrow? Do you have insurance against vendor bankruptcy?

It's a very real issue. Misery is being dependent on software from a failed vendor.

Look at SCO's stock chart. [yahoo.com] The stock has dropped from 19 to 8.75 in the last three months, and it's dropping almost every day now. [yahoo.com]

Don't forget... (0)

Anonymous Coward | more than 10 years ago | (#8581384)

To pay your $699 licensing fee!

Re:Don't forget... (0)

Anonymous Coward | more than 10 years ago | (#8581408)

That way you won't get sued by SCO.

SCO Thinks... (2, Insightful)

tanksalot (762778) | more than 10 years ago | (#8581390)

From the article:

SCO believes that its $699 per processor Intellectual Property License for Linux, however, is a better idea. "Ours is certainly the most reasonable way to go and certainly the safest way to go," he said.

Kinda using the words 'reasonable' and 'safest' loosely huh?

---

How would you know they could pay? (4, Interesting)

astrashe (7452) | more than 10 years ago | (#8581392)

Don't insurance companies have to have assets to back their policies?

How would you figure out how much money would be necessary to back these policies? If you believe that the risk is zero, and they don't need money, then the business becomes a confidence scheme. If you believe that the risk isn't zero, you need something to back it up.

On top of that, if you insure people against auto accidents, or serious diesease, you can assume that everyone won't get hit at the same time. But if it turned out that running linux exposed you to liability, then all of the policy holders would have to be paid off at once. In other words, there's no way the premiums would be able to cover it.

I'm not an actuary or an insurance expert, so maybe I don't understand what's going on. But it doesn't smell right to me.

Re:How would you know they could pay? (1)

fembots (753724) | more than 10 years ago | (#8581467)

Yeah it is a very good point, imagine how many life insurance companies went out of business or bailed out by the government because of 9/11.

As stated by the parent post, a simliar (but proven) SCO case can well involve the whole development community, and it's going to hurt even more for those insured.

Open Source Insurance - about time (1)

Old Wolf (56093) | more than 10 years ago | (#8581402)

About time. I hate finding out just what is supposedly in my insurance policy, after it's too late, and having to jump through hoops to get clauses added.

Warning: BLATANT PLUG (5, Interesting)

cleetus (123553) | more than 10 years ago | (#8581432)

This summer I had the opportunity to work for BlackDuckSoftware.com [blackducksoftware.com] . Black Duck has built software to help developers (from individuals to large corporations) manage their use of open source software. Essentially, the software enables firms to track the usage of open source code, determine conflicts (if any) and suggest methods of compliance. It takes into account methods of combining code, whether the code is for internal use or public distribution, any number of other considerations that involve open source license compliance. It is able to deal with code licensed under *all* of the certified open source licenses [opensource.org] as well as many other proprietary licenses.

While it is not insurance, and does not provide any kind of indemnification, it is a damn good management tool. Its goal is to allow companies to make use of open source code in such a way that full compliance is facilitated, and to avoid any uh-oh moments that happen after code is commerically released.

I worked on the development of the license interpretation module. It involved reading (and re-reading) 50+ licenses and parsing their terms such that compatibility determinations and compliance requirements could be generated for every possible combination of license, code, distribution, concatenation, link, modularization, etc. of a software product. It was exhausting (and sometimes tedious) work, and it certainly made it easy to tell which licenses were written by lawyers, which by coders, and which were written with input from both. It gave me new understanding of why unenlightened legal departments sometimes shy away from open source. Nonetheless, the reality is these licenses exist, are in use today, and are all valid until some court says otherwise. Licensors (i.e. coders in the community) have every right to expect their terms to be adhered to.

Being a geek myself, and a law student, it was pretty gratifying to see that a company wanted to build a product that helped managers to understand and not fear the open source phenomenon. Further, I think the product will really help firms stay fully compliant when they decide to use open source code. And that, in the end, is all our community can ask for.

cleetus

Good idea in my mind! (1)

MarkTina (611072) | more than 10 years ago | (#8581477)

I personally don't trust software that's probably written by some spotty 14 year old going by some odd name like "L3kk3r" ... open source seems to be mostly written using the "Bodgitt & Skarper" methodologies, at least if it comes from a company they are more likely to produce a design (remember those funny things from university ? You do them BEFORE you code! :-) and are less likely/able to run a mile when things go wrong.

Re:Good idea in my mind! (0)

Anonymous Coward | more than 10 years ago | (#8581513)

" at least if it comes from a company they are more likely to produce a design "

In the real world it's like pulling teeth to get management to support any sort of research and design work.

Worthless Insurance (0)

Anonymous Coward | more than 10 years ago | (#8581479)

The idea behind providing insurance is that some of your clients will have claims, and some of them won't.

To see how this doesn't work for open source, imagine the situation with SCO: if the insurance company ends up being compelled to pay damages to SCO on behalf of one of their clients, then it is quite likely they will also be forced to pay damages on behalf of ALL THEIR OTHER CLIENTS.

This insurance is worthless. Either you need it, in which case OSRM will have to charge you very high premiums in order to insure you, or you don't need it anyway.

Why doesn't Linus offer insurance? (-1, Flamebait)

Anonymous Coward | more than 10 years ago | (#8581500)

If he wants us to use his OS, he should step up to the plate and guarantee his product. Seriously. If he doesnt want to be RESPONSIBLE like a real commercial developer (i.e. Microsoft, Apple, etc.), he needs to cease developement on Linux and finally realize it is a hobby project, and not a serious piece of work.
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