[NTLUG:Discuss] IP idemnification - a concern?

[Steve Baker]

Overall, the industry doesn't need indemnity insurance.  It's a
zero-sum game - except that the insurance companies will take their
cut.

Just look what happened to the Medical profession.  Everyone who
might even remotely get sued takes out malpractice insurance.  Hence,
there is far less deterrance against malpractice.  Patients who are
victims get lots of compensation - but at the cost of jacking up
health care costs.  Since the insurance companies make profits on
malpractice insurance, the average payout per patient is less than
the average cost per patient.   It would be better to allow each
person to take out insurance against something bad happening to them
at a level they regard as good risk.

Worse still is the situation in some branches of medicine where Doctors
simply cannot afford malpractice insurance - and they leave the profession.

The same thing would happen to software indemnification.  We're better
off writing license clauses that say "we take no responsibility" so
we can sell software more cheaply (or give it away) than we are having
victims of bad software claim damages.

So long as this is the standard practice in the industry, everyone
will accept it - just as they have done for 40 years.  However, if
enough people start offering indemnity - that could start to become
the norm - customers and the courts will start to claim damages
whenever software has a bug - which (since *ALL* software of any
complexity has bugs) would mean the end of OpenSource and the end
of most small companies.

Big companies (Microsoft, IBM, etc) can act as their own insurers.
The smaller companies cannot.  That means that some proportion of
their income is turning into insurance company profits - and on
the average they'll be less economic than the big guys as a result.

Just say no.

---------------------------- Steve Baker -------------------------
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HomePage : http://www.sjbaker.org
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