Startup to Offer Open Source Insurance

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.

Comments

Malpractice Insurance

[Shakrai]

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.

Re:Malpractice Insurance

[Zorak Man]

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

[ChuyMatt]

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

[Shakrai]

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

[Dan512]

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

Re:Malpractice Insurance

[brulman]

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.

Re:Malpractice Insurance

[Anonymous Coward]

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

[Decameron81]

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

[Futaba-chan]

$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

[Anonymous Coward]

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.

Re:Malpractice Insurance

[kfg]

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

[pjt33]

Careful, you might spoil grandparent poster's illusion that the US is the world.

Re:Malpractice Insurance

[HD Webdev]

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?

Not to mention, laws vary depending on location about disclaimers.

Re:Malpractice Insurance

[cmburns69]

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 insurance cycle feeds itself. You're more likely to sue if you think you'll get a big payoff. Since your now more likely to get sued, you're more likely to get insurance.

This "peace of mind" comes at a high price to society. I'm not saying I personally know of a better solution for protecting your self from calamity, but a better way has to exist.

Re:Malpractice Insurance

[snkline]

It goes even further than that, since in states with strict liability, for certain types of dogs (and other dangerous things) no disclaimer is enough. If that dog bites someone, your ass is grass, and probably the person's ass who sold that dog to you too.

I wouldn't be suprised if strict liability could be applied to some software defects as well. Makeing insurance a pretty big necessity.

Re:Malpractice Insurance

[Anonymous Coward]

The agency I work for has several carriers that will write a malpractice (officially called "Professional Liability") policy for computer nerds.

Care to name any of them? Are any of the other posters prepared to name some (good ones :) Having this kind of insurance would be very useful to me.

Re:Malpractice Insurance

[MarkedMan]

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

ABSOLUTELY NOT! Trust me on this one. Insurance is about having a guy on your side with a team of experienced lawyers. That is what it is for. If you don't have that, they can skin you alive. Because of some bad advice I got from my insurance broker, I spent over $100,000 on attorneys fees for a case that a jury would have laughed out of court. But that's the rub: the plaintiff's lawyers make it as expensive as possible to get to court, and even there you better be good looking and well spoken or the jury might decide to split the difference. Heck, with all those big words getting thrown around, you could lose because a single juror misunderstood something trivial.

The reality is that there is no justice for a small business standing alone. Lawyers are sharks and you are penguins. Tasty, tasty, defenseless penquins. They know they can wear you down, because there is nothing you can do to stop them. You can't represent yourself, because one mistake in filing means you lose the whole case and your house, savings and life goes down the tubes.

Despite the above, I'm not really bitter. It's over and I'm glad it is over. But I really understand the need for insurance now, which is to bring your own personal shark to the party...

-Jim

Re:Malpractice Insurance

[slam smith]

My concern about a policy like this is that people will find out that you have it and then they would be more likely to sue you because the insurance company would have to pay.

Re:Malpractice Insurance

[tomreagan]

No, it cannot. Open sourcing software limits your liability, but you are always liable for products that you sell. Disclaimers can help, but they are not the solution.

And since I, too, sell this kind of insurance, I can tell you that it's getting to be a pretty good thing to have if you develop software.

Re:Malpractice Insurance

[decsnake]

I think that says a lot about the probability of being sued in Canada vs. the US

Re:Malpractice Insurance

[whoever57]

Actually, I heard the reverse: by putting up the sign, you are acknowledging that you know your dog is dangerous and thus, you acted negligently by not securing the dog.

By not putting up the sign, you can later argue that you did not know that the dog was a risk. Obviously, this will only work once.

Re:Malpractice Insurance

[iminplaya]

A few hundred or thousand bucks for peace of mind is a small price to pay in this day and age.

Don't give in. "That's just what they'll be expecting us to do" :-)

Re:Malpractice Insurance

[Dalcius]

How does this judge handle cases where the defendant can't afford a laywer or at least a competent one?

When the rules governing society are so complex that a member of society has to hire someone to explain them, where have we gotten ourselves?

Can anyone honestly explain to me how I, as a programmer and prospective business owner, can defend myself in court with little or no money to spend on lawyers?

Cheers

Re:Malpractice Insurance

[iminplaya]

And anyone can sue you over damned near anything.

That's the nice thing about not owning anything. I can always tell them, "Bring it on." I don't need no stinkin' lawyer to tell you I'm one broke MOFO.

Re:Malpractice Insurance

[Anonymous Coward]

I believe this "professional liability" insurance is also known as "errors and omissions" insurance. In the contracting community, carrying this kind of insurance is widely regarded as a great big "sue me" sign and any requirement to carry it should be negotiated out of a client's contract. The reason is, as the OP described, it is very broad, thus making it exceptionally easy for an unreasonable client to make a claim. When you get sued, even if you have insurance (maybe especially if you have insurance), you can count on spending a lot of time in the legal entanglement and instead of doing real, income generating work.

Now, if professional liability insurance had a "no hassle" rider to guarantee not to waste your time, or at worse reimburse your at your regular hourly rate, then it wouldn't be quite as counter-productive as it currently is.

PS - Don't confuse E&O with general liability which is probably a good thing to have.

Re:Malpractice Insurance

[ElectricRook]

Can anyone honestly explain to me how I, as a programmer and prospective business owner, can defend myself in court with little or no money to spend on lawyers?

Sucks don't it...

I think it was G. G. Liddy that said "The most expensive thing you could every buy is a cheap Lawyer".

Re:Malpractice Insurance

[Shakrai]

The insurance cycle feeds itself. You're more likely to sue if you think you'll get a big payoff. Since your now more likely to get sued, you're more likely to get insurance.

My personal solution (see this post of mine under a different thread) would be for the Insurance companies to stand up to the bogus lawsuits and fight them instead of settling. Of course they won't do this because it would cost more to fight then it would to settle -- so the cycle continues.

This "peace of mind" comes at a high price to society. I'm not saying I personally know of a better solution for protecting your self from calamity, but a better way has to exist.

Yes and no. I'll grant you it comes at a high price when you factor the ambulance chasers into the equation. But what about legitimate screw-ups on your part? If your neighbor falls down on your property because you didn't fix your staircase should that ruin your life or his? Assuming you have homeowners insurance it's going to cover his medical bills -- both of you win in this scenario. You certainly don't deserve to have your life destroyed over it and he doesn't deserve to pay thousands of dollars of medical bills that he shouldn't have incurred. The insurance companies themselves win because (assuming they price their risks properly) they write enough business to make up the loss and gain a healthy profit.

Likewise if you sideswipe someone coming out of a car lot with his brand new $100,000 Mercedes should you have to eat that out of your pocket? That probably ruin your life. Insurance is about protection from loss. It's not inherently evil or good. It's a product like everything else.

I'll grant you that something does need to be done about the ambulance chasers though. What do you think about my suggestion from the referenced post above (not that it will happen)?

Re:Malpractice Insurance

[kfg]

The quick honest answer is that you can't, and even lawyers depend upon other lawyers to defend themselves.

You can acquire a certain facility with the law, in some cases of specific law even a superiour facility than the legal general practitioner. This will allow you, at least, to do a reasonable job of arranging settlements and plea bargains, although not generally quite as good as you could obtain with a lawyer.

If only because the lawyer has a professional acquaintence with the judge and DA. They have a way of doing business with each other. You're just some scmuck.

But where even a mediocre lawyer is going to kill you, even in those circumstances where you know law and logic to a greater degree than the lawyer, is in purely procedural matters. The pure mechanics of moving a case through the courts. It's second nature to him, done without thought. It's terra incognito to you.

Just as a physicist may know more about mechanics than an engineer, but a civil engineer is more likely to build a sounder bridge.

Your only real defense is in that most cases are petty. They cost no more to capitulate to than to sucessfully defend against.

Spend what little money you have for lawyers up front, in drafting your contracts and business procedures. Become well acquaited with whatever boilerplate you might use. Use the law prophylatically and you have a better chance when representing yourself in court.

And when all else fails there's little you can do other than taking your losses with a benign resignation to fate. Don't take the failure personally. It isn't a moral issue. Pay the judgement, pick up the pieces and get on with your life, knowing that it would have likely cost as much to "win" anyway.

KFG

Re:Malpractice Insurance

[ichimunki]

Just for the sake of argument, are you really including in that per capita figure "all other countries"? Do you have this per capita number on a country by country basis? And are you really prepared to compare the U.S. to all the places where the rule of law is nothing but a dream? At least here we have some hope of it-- I think I'd much rather be the target of an otherwise peaceful lawsuit than caught in the middle of some "civil" war between clans or the wrong side of some druglord's private army or whatever.

The more interesting numbers would be the ratios of lawyers to citizens in other fully modern democracies like England, France, Germany, Canada and Japan. I can't imagine the French (for example) have fewer laws and lawsuits than the U.S., not by any worthwhile amount anyway. For a better analysis of this Dan Quaylism, see this report, which contains numbers showing that the United States is far from winning the "overlawyered" race.

Re:Malpractice Insurance

[cmburns69]

Perhaps legitimate screw-ups should be eaten up by the person who made the mistake. While there are accidents which are truly unpreventable (Act of God, Force of nature, etc), many things could be prevented. I should have fixed the stairs before inviting my neighbor over. I should have been more careful before pulling out into somebodies new Mercedes.

Sometimes crap happens.

This post is mostly Devil's advocate, but I do think the mentality of entitlement has gotten out of hand. An example is the Native Americans continuing to demand (and win!) special treatment from the Government. While I don't think what our Gov't did to them was correct, I do know that it WAS in the past, and there's no way to go back to the way it was.

Re:Malpractice Insurance

[jeffasselin]

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.

I have such an insurance, 1 million CDN$ liability. It's part of the regular professional insurance package, it costs me about 250$CDN per year for this, along with professional equipment insurance (my computer, laser printer, etc).

Re:Malpractice Insurance

[Dalcius]

Pretty sad.

"If only because the lawyer has a professional acquaintence with the judge and DA. They have a way of doing business with each other. You're just some scmuck."

But if I'm the defendent, I'm the one getting my life ruined. "Some schmuck" is a pretty silly attitude to take if you're getting the shaft and have no money to defend yourself with. It's no longer about right and wrong but about cash (duh). I'm not arguing with you, just lamenting. It's pretty pitiful when the laws governing your life are too complex for you to understand.

To address your second point, it should be considered that when you're starting a business, money to spend is almost always the last thing you have. Of course this detail has no place in the current reality of the courts, I'm sure.

*sigh*

Re:Malpractice Insurance

[rgmoore]

Actually, one side benefit of insurance is that it tends to force people to adopt good standards. Insurance companies understand the concepts of "adverse selection" (people who are bad risks are more likely to want insurance) and "moral hazard" (people who are insured are more likely to be sloppy and/or dishonest) and take steps to minimize these problems. One big thing that they do is to force their customers- or at least provide them with strong incentives- to adopt good practices that reduce the rate at which payouts are necessary.

As an example, before selling a business theft insurance, the insurance company is likely to perform an audit of their security. The company might reduce the rate if the business wanting insurance installs a high quality alarm system or refuse to insure them at all unless they hire guards from a reputable security company. For fire insurance, they might require good alarms, sprinkler systems, and employee training. The same thing will probably be true of things like programming malpractice insurance. Insurance companies will give much better rates to people who have certification proving that they've passed professional training in writing secure programs, have adequate pre-release testing, etc.

Re:Malpractice Insurance

[Frizzle Fry]

I think it was G. G. Liddy that said "The most expensive thing you could every buy is a cheap Lawyer".

I didn't know it was possible to buy lawyers at all.

Re:Malpractice Insurance

[SillyNickName4me]

> Perhaps legitimate screw-ups should be eaten up by the person who made the mistake. While there are accidents which are truly unpreventable (Act of God, Force of nature, etc), many things could be prevented.

Yes, and many things couldn't.
What you are arguing here is exactly what is causing theliability insanity and lawsuits in the USA.

> While I don't think what our Gov't did to them was correct, I do know that it WAS in the past, and there's no way to go back to the way it was.

No. there is a way to compensate for it tho.
This is also a very bad example, first of all, this was not a legitimate screwup, and 2nd, compensation for damage done on purpose and for the reason of monetary gain is not bad to ask for really.

Many screwups we have to carry as a society as a whole. Why? because you make life into a minefield if you don't.

Re:Malpractice Insurance

[Anonymous Coward]

All insurance should be no-fault and of the "disability type." That way there is no incentive for ambulance chasers (although there is still incentive for the insurance company to short-shrift the customers, but unlike ambulance chasers abusing the current system, the insurances companies at least have the incentive of the free market to not mis-treat their customers).

That way, the guy with $100K mercedes pays the premium for protecting it. The neighbor who climbs your rickety staircase of their own free-will pays the premium for having a free will. To continue the comparisons - you go to have surgery and the doctor cuts off your leg by accident - you pay the premium to be protected from the risk to your income from such an event.

Re:Malpractice Insurance

[Anonymous Coward]

I didn't know it was possible to buy lawyers at all.

Of course it is, they are all just tadpole politicians.

Re:Malpractice Insurance

[Anonymous Coward]

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

So much for, "innocent until proven guilty."

Re:Malpractice Insurance

[AvitarX]

Actaully what you are supposed to do is put up a
"Dog on Premises" sign. That way noboby can clain they did not know there was a dog, but you are not admitting to the dog being dangerous.

Re:Malpractice Insurance

[ChuyMatt]

From the ABA "United States has no more than 25 to 35 percent of the world's lawyers." This is adjusted for people doing law work that would require a cert in the US. And we have what % of the people? 290,342,554 in the US, a little under 6 _Billion_ in the world...

Tho far from the 70% of Quale (i would never quote that guy on anything, never even mentioned him), the number is still very high. Keep in mind, this is from the American Bar Association...

Re:Malpractice Insurance

[Anonymous Coward]

I'd much rather live under the rule of common decency like most of europe than under the rule of "law" handed down from "above" like the merkins stateside...

Re:Malpractice Insurance

[Pat69]

It also says a lot about the potential damages that might be awarded. Awards for proven financial loss is about the same as the US, but punitive damages are much, much less.

Re:Malpractice Insurance

[ichimunki]

If you read the article I linked it is clear that most of this hinges on the definition of "lawyer", which varies greatly from place to place. Further if the ABA's estimate is a 10 point range on a 100 point scale that means that they really don't know and are just guessing. Unless you have sound evidence to back up your claim you are just guessing, too. In any case, the problem this country has is not too many lawyers.

Higher supply side numbers typically have a downward pressure on prices, even in a guild-protected profession like lawyering. The problem this country has is too many laws (even worse are the extralegal regulations that act with the full force of law). Why do we have too many laws? Because people keep voting for other people (often lawyers) who promise to fix whatever's wrong with the voter's life by (you guessed it) passing a law.

And if that's even really a problem, most Americans are way too distracted to care about it. And if that's possible, I'd say we have it pretty good-- or at least we seem to have what we want. And if that's because of all the lawyers, then so be it.

Re:Malpractice Insurance

[ScrewMaster]

Disclaimers are a last-ditch defense anyway. If you actually need the disclaimer you're probably already knee-deep in Bantha poo-doo.

Re:Malpractice Insurance

[Anonymous Coward]

There's also the point of view to consider that if you can't afford the costs of doing business, perhaps being in business isn't for you. Put aside $500 a month of income for a legal defence fund so that, in the event you do need legal representation, you'll have $6000/year budgeted. If that's not something you can afford, then perhaps being employed will be more profitable for you.

Re:Malpractice Insurance

[Dalcius]

You have a very good point, one that I have considered. Two sticking points though:

1) I still question why the law must be so complex that an intelligent businessman can't understand it. Talk to a business lawyer: there are no absolutes. You can spend hundreds to thousands to write a nearly bullet proof contract which not only requires an insane amount of research and know-how, but it's still not a guarantee after all that work and money. These laws govern our lives, this isn't something you can pass off as "oh well, them's the breaks." Obviously that's reality, one man can't fight city hall; this is but a philisophical discussion.

2) Many "businesses" are self-employed people who do, for instance, landscaping work on the side like my father, or surfacing work like my neighbor. The business I'm considering investing in is such a business. Small businesses catering to contract work, small markets, or markets where a large organization doesn't make sense often don't make more than a few thousand a month. In the case of self-employment on the side, even less. Spending for a legal fund is often unrealistic.

People these days have the view that businesses are large corporations with fire-breathing lawyers who want to eat the souls of the consumer. When laws get passed, it's often forgotten that a very large portion of the economy is small business, and that a sizable chunk of that is made up of two-bit companies or self employed folks who are making a living outside of a corporation.

A little sanity in the legal and legislative system would be long overdue.

Cheers

Re:Malpractice Insurance

[SphericalCrusher]

Of course not. People always find ways around and through it, even if, technically, they are wrong.

Somewhere down the line, Open-Source businesses will grow.. and they are going to need funding. I'm sure distributing their software in bundles and advertising won't really make enough money in the long run. Even if they still launched an IPO... there is still that money shortage.

After all, the two necessities of life = time and money. What happens when you put more time into something and don't receive enough back (money)? People start to complain...

Re:Malpractice Insurance

[Anonymous Coward]

Hi,

It looks like you're a wannabe lawyer, so let me correct some of your unnecessary obfuscations.

superior, acquaintance, schmuck, terra incognita, prophylactic

Your friend clippy.

Re:Malpractice Insurance

[kfg]

Clippy is nobody's friend, Skipper.

KFG

code-malpractice

[mod_critical]

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

[tomhudson]

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

[Anonymous Coward]

Maybe if you have a bad DBA...

Re:code-malpractice

[dillon_rinker]

...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

[whittrash]

For the most part, the insurance industry is highly competitive. Anyone who charges too high a rate gets dumped for a cheaper alternative. A mature insurance industry can accurately price risk. This will be a good way to protect yourself and for skittish management types this is an effective way to allay their fears for a reasonable cost. Should any IP issues arise, you know you are covered and the insurance company will pay out to fix your problems.

I imagine this kind of insurance will force higher standards and better copyright management of code. They won't insure anything unless it is as safe as possible. I wonder if this will force a consolidation among Linux distributions and much more extensive record keeping?

Re:code-malpractice

[Monkelectric]

"The difference between theory and reality is, in theory there is no difference between theory and reality, and in reality there is." (don't know who said that first)

Re:code-malpractice

[tomhudson]

Come on, if you can't write code that can round properly to the second decimal place, you're going to be uninsurable anyway :-)

Re:code-malpractice

[tomhudson]

I don't remember either, but that quote made me smile, so you're on my friends list :-)

Re:code-malpractice

[slam smith]

All I know about Bush is I had a job when Clinton was president.

Is that you Al Gore?

Re:code-malpractice

[Bombcar]

All I know about Bush is I had a job when Clinton was president. - Saddam Hussein

Re:code-malpractice

[ACPosterChild]

You have good points, but I must point out that he said "hundredths", not "hundredth". So, he's talking about the 2nd decimal place.

As an aside, I know that you can generally only trust about 6-8 decimal places on a 32-bit floating point number. I think you'd have to do some major mojo anyway to even think of trusting 100 decimal places.

Re:code-malpractice

[tomhudson]

you're the second person to point that out to me ... I guess I need a vacation :-(

... all of which means that there should never be a rounding error for such a value (2 decimal places) ... and correcting it is even easier ...

I can understand a rounding error at 100 decimal places, as you're using a non-standard library for such numbers ... but monte carlo simulations have other sources of "considerations" that only the naive or inexperienced would fail to take into account.

If you're writing monte carlo or random-walk sims, you should be good enough to catch a 2-decimal rounding error :-)

But thanks for pointing out MY error :-)

Re:code-malpractice

[ACPosterChild]

Yeah, I figured it was a simple mis-read :)

Not former. Current.

[Anonymous Coward]

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

That alien abduction insurance

[Anonymous Coward]

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

Re:That alien abduction insurance

[Patrik_AKA_RedX]

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

Re:That alien abduction insurance

[Servo]

Pick a better neighborhood to get abducted in next time.

Re:That alien abduction insurance

[iminplaya]

So, they took you to Palm Springs, too...eh?

"former editor"?

[Anonymous Coward]

I thought she still heads groklaw...

Re:"former editor"?

[trick-knee]

> 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...

Eye Strain Insurance

[richarst1414]

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

Re:Eye Strain Insurance

[Anonymous Coward]

More like sore belly muscle insurance :D

'code malpractice' insurance

[Anonymous Coward]

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

It's called Errors and Omissions insurance.

Re:'code malpractice' insurance

[tonywong]

Yes, I'm surprised everyone's making a fuss about it. We've carried it when we had 32 staff, and we still carry it now that we're down to 3 (full timers). It was 12k for the full load, and now it's under 4k (all CDN).

We've done work for IBM and other large institutions and all of our contracts with our clients carry indemnification and insurance and other liability clauses. It's just the normal course of business.

Job Security?

[shystershep]

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?

[The Blue Meanie]

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?

[zurab]

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.

Re:Job Security?

[Anonymous Coward]

Do I need insurance for Quarter Pounder with cheese as well?

That's usually covered under Health Insurance

Re:Job Security?

[SpaceLifeForm]

So, Darl is a chowderhead?

That seems to be overly generous.

Why?

[Anonymous Coward]

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?

[morcheeba]

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?

[Anonymous Coward]

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...

[TWX]

...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?

[Anonymous Coward]

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

Pushing out small fish?

[fembots]

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.

Re:Pushing out small fish?

[LMCBoy]

Announcing Slashdot Sniglets!

alligation: The process of being consumed by an alligator. See also Crocidation.

It's a good idea

[stratjakt]

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

[John Hasler]

> 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

[nomadic]

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

[DjReagan]

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

Re:It's a good idea

[tornado2258]

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.

Re:It's a good idea

[pokeyburro]

It's too bad. I read the headline and immediately thought of a comment I posted last November.

Seems this is nowhere near the same thing. I proposed insuring people against the cost of fixing a bug in open software. This, OTOH, is simply litigation risk management. Feh. Well, still a fairly good idea, I suppose. It just doesn't strike me as being terribly constructive.

Re:It's a good idea

[zurab]

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

Using what legal principle? What did the "user" do wrong? You can surely go after people who copied and redistributed the code without permission, people who entered into a contract with you and violated it, but how can you "go after" anybody else?

Is your ATI or nVidia video card insured in this way? You know, just in case they go after each other and start suing each others' customers? How about your sound card and monitor? This is crazy.

Re:It's a good idea

[ttrafford]

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

Really? So if twenty years ago I built my own Polaroid-like camera, the company could come and sue me? Just for having it?

Former Editor?

[PopeJP3]

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

And Microsoft Insurance ....

[Mansing]

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

Re:And Microsoft Insurance ....

[Seraphim_72]

....and is printed in invisible ink on blue paper....and comes with it's own eula.

Excellent news for open source

[murr]

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

[tomhudson]

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

[Anonymous Coward]

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!

Re:Excellent news for open source

[Chazmyrr]

Who do you sue if the vendor goes under? How do you sue a company that no longer exists? How do you get support/patches/etc for your proprietary software after the vendor goes under?

If the answer to these questions matters at all to your company, you either put access to the source in your contract with the vendor, develop it yourself, or use an existing open source project.

Re:Excellent news for open source

[iminplaya]

It's open source capitalism at its finest.

It's insurance capitalism at its finest. When it becomes mandatory, it will be extortion by insurance companies at its finest. Just like auto insurance. If that were to happen, I would demand no fault insurance.

Re:Excellent news for open source

[zcat_NZ]

Software insurance doesn't 'fix' the bugs, but you have the source code so it could cover paying a programmer who can fix it. It can also cover the cost of your business being closed three days while you restore all the backups, the cost of having to re-enter data after it got corrupted, legal fees you encounter when a bunch of people's payment details end up on a website somewhere.

OSS doesn't give you this, but neither does Microsoft.At least with OSS you have the option of paying for it.

What does Microsoft give you? They'll refund the price of the CD, and no more. If Microsoft decides that a bug isn't worth fixing, you are SOL. If you lose data, or get sued, or whatever, Microsoft _might_ refund the $300 or whatever per copy that you payed for the CD. Or they might decide that it's not their fault at all and you have to sue them to get even that. For everything else, you are SOL.

Don't believe me? Pull up the EULA for any Microsoft product, and scroll down to he last clause. It's completely unambiguous, all in capital letters, and it's usually also the only clause in the whole EULA that gets repeated in French and Spanish. Microsoft it quite clear on this, argue liability in court and you WILL lose.

Re:Excellent news for open source

[tomhudson]

Click-thru EULAs don't hold up in non-US courts. Also, the printed EULA that comes with the license isn't a valid contract, either. Furthermore, in some jurisdictions (including mine - Quebec) the consumer protection act specifically prohibits onerous clauses that are non-negociable where there is a significant disparity between the parties.

The reason Microsoft puts EULAs in their products is pure FUD - they're afraid of liability, because they know their products are pure shit, and that all it takes is one loss in court to bankrupt them (same as the tobacco industry).

She's not a former editor!

[m0nkyman]

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

Check your facts.

Re:She's not a former editor!

[nadamsieee]

This is an error in the Infoworld article; PJ has addressed it in a Groklaw article where she goes on to discuss the future of Groklaw.

Re:She's not a former editor!

[bendawg]

This article confirms that statement.

Re:She's not a former editor!

[bendawg]

whoops..didn't notice someone else had submitted that link.

Nothing new

[Ralph Yarro]

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

Re:Nothing new

[Sri Lumpa]

If SCO's $699 price is relly a one time price and an insurance against just these risks does that mean that they will indemnify me when another company with alleges some of their IP is illegally in Linux and they ask me for $650?

Will they indemnify me for each such companies?

If so the easiest way to get rid of SCO is to have a dozen friends of yours claim exactly what SCO is claiming and offers licenses to use their IP and everybody buy the SCO license confident in the fact that SCO, being a company with such respect to "IP rights" and contracts, will pay the $650 * 12 necessary for these licenses.

If not, then SCO's license is no insurance at all and is totally useless as they cannot guarantee that their isn't any more alleged IP problems in Linux.

What about closed source companies?

[AndroidCat]

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?

[Anonymous Coward]

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!

Re:What about closed source companies?

[kfg]

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

Nothing sells better. Just watch TV ads for a while, or walk down the isles of a supermarket, particularly the drug/personal care isles.

It's all sold by sex and fear, and fear of not getting sex. The heartbreak of psoriasis. The social outcasting of dandruff. The horror of your whites not being white enough.

What will the neighbors think?

Most people live by FUD while pursuing their lives of quiet desperation, and most companies at least parasitically prey on that fear. Some of them subsist on it entirely, even going so far as to create fears, through marketing campaigns, that had never previously existed, and which their product "solves."

KFG

Re:Former Editor?

[One Louder]

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

Yet another thing to come out of the....

[Anonymous Coward]

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...

[steveha]

...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

[sleepingsquirrel]

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

[Shakrai]

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.

Re:Legal extortion

[Ohreally_factor]

Just wait until you get into an accident and need to collect money from an insurance company without the help of an "Ambulance Chaser". I wish you luck.

When you are refused money that you might deserve for loss of wages, when the insurance company fights you for the difference between what they say you need for physical therapy and what you really need, good luck. I'm sure your low premiums will more than make up for this.

Re:Legal extortion

[Shakrai]

When you are refused money that you might deserve for loss of wages, when the insurance company fights you for the difference between what they say you need for physical therapy and what you really need, good luck. I'm sure your low premiums will more than make up for this.

Then get a lawyer and sue them. That's a no brainer. I have a problem with the "Injured? We can help! No charge unless we collect!" industry that seems designed to do nothing but suck money out of Insurance companies for even the most trivial of excuses. We all pay for this. Unfortunately I don't know what the solution is.

Re:Legal extortion

[Ohreally_factor]

Sorry, I assumed too much: that you were calling all personal injury attorneys "ambulance chasers".

Why Price Might be High/Low

[4of12]

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?

[djh101010]

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?

[fembots]

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?

[djh101010]

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.

Re:Will they indemnify us against SCO?

[MarkGriz]

SCO is the illness. AutoZone and DaimlerChrysler are the unfortunate patients with the preexisting condition.

"No indemnication for you! NEXT!!!"

Re:Will they indemnify us against SCO?

[prgrmr]

Hey mods, a repost of text of a slashdotted site is not redundant, it's informative

Actually it's a copyright violation and the slashdot editors would do well to delete them as soon as they are posted.

Re:Will they indemnify us against SCO?

[Azghoul]

So, please tell, how do you explain the existance of Google's cache?

Re:Will they indemnify us against SCO?

[prgrmr]

Google and the InternetWayBackMachine are also violating copyrights by republishing without permission. They are tolerated and even encouraged because much of the internet content is by businesses and these venues are more forms of (free as in beer) advertising, and because much of the remaining content of the web is published with the intentions of being for public consumption and colaborative endevors such as Open Source development and disemination of scientific information.

Re:Will they indemnify us against SCO?

[Anonymous Coward]

It's called "Fair Use" and it's allowed by law. You should look it up.

Re:Will they indemnify us against SCO?

[Idarubicin]

It's called "Fair Use" and it's allowed by law. You should look it up.

So should you.

Let's say I want to check a book out of the library. Regrettably, all their copies are in use by other readers, but my friend did snag a copy. It's not fair use to photocopy the entire volume so me and my buddy can both have one.

Just because it's inconvenient that a site is slashdotted, it is not necessarily fair use to reproduce the content in its entirety elsewhere without the permission of the copyright holder. Slashdot's own FAQ addresses some other problems with mirroring.

But then, I'm replying to an AC. Must not feed the trolls! *smacks forehead*

Woo Hoo!

[Anonymous Coward]

I just saved a bundle on my Linux insurance!

Re:Woo Hoo!

[Anonymous Coward]

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

Re:Woo Hoo!

[MarkGriz]

"I just saved a bundle on my Linux insurance!"

... by switching to Gecko

Re:Woo Hoo!

[Anonymous Coward]

You know, I never thought I'd find myself advocating capital punishment, but in the case of GEICO's constant and ridiculous/annoying ads, I'm beginning to wonder if killing their marketers is actually a good idea...

Programmers' malpractice?

[PCM2]

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?

Re:Programmers' malpractice?

[SailFly]

By the same token, I have a clause in my contract to the effect: "If I'm sued for something I did for you, then you will pay for my time in court" I've never had any issue with a client signing this.

Re:Programmers' malpractice?

[flonker]

I've been thinking about getting insurance so that I get the doctor's way out.

"Can you come over and fix my AOL?" "I'm sorry, my malpractice insurance doesn't allow me to."

Malpractice == good!

[FortKnox]

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 ;-)

Re:Malpractice == good!

[Anonymous Coward]

' Simple Solution:

do until lawyer.eof()
lawyer.KILL()
lawyer.next()
enddo

Starting my own insurance company

[Atario]

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:Starting my own insurance company

[Monkelectric]

Calculon: And you guarantee I'll win an Oscar if I fund the movie?
Bender: I can guarantee you anything you want.

I've got some good news!

[stratjakt]

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

Re: Alien Abduction Insurance

[tomhudson]

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

[weopenlatest]

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.

Re:Good alternative to SCO license

[oGMo]

I would bet that many if not most of the companies who paid SCO licensing fees would have opted for this deal instead, [...]

All two of them?

Re:Good alternative to SCO license

[iminplaya]

If insurance like this got more popular, it could seriously weaken SCO's business model.

It would strengthen the insurance company's business model. Not necessarily a good thing. This could catch on, and later the insurance companies will start lobbying to make this mandatory.

Re:She's not a former editor yet!

[Vlad_the_Inhaler]

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 :-)

Comment removed

[account_deleted]

Comment removed based on user account deletion

Bad incentive structure

[Phat_Tony]

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

[skywolf]

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...

Re:Bad incentive structure

[Anonymous Coward]

...
wow
...

I love you!

Re:Bad incentive structure

[Phat_Tony]

If this were the case, SCO could not sue anyone but IBM, whom they claim contributed the supposedly infringing code to Linux.

Unfortunately, I suspect the actual costs to end users Daimler-Chrysler and Autozone are non-zero.

I wish it were true, though.

Re:Bad incentive structure

[scrytch]

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.

Company has to account for missing million, asshole developer has to launder the money, insurance company investigates fraud, asshole developer goes to prison ... everyone's insurance rates go up anyway, and pretty soon developers will be where doctors are today -- being driven out of business by insurance premiums so only gigantic conglomerates like Catholic Healthcare West can afford to carry the liability (Catholic Healthcare West, who has monopolies in many areas ... who needs to overturn Roe v. Wade when corporations do just fine at it).

I gotta find a new profession.

Re:Bad incentive structure

[k_head]

How do you know MS is not paying people to do this right now?

Good marketing but for the wrong reason

[SenFo]

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

Microsoft Insurance

[IO ERROR]

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

Go back to troll school!

[Anonymous Coward]

Your lack of formatting makes baby Jesus' eyes bleed.

What's wrong with this?

[Cainam]

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?

[Animats]

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. The stock has dropped from 19 to 8.75 in the last three months, and it's dropping almost every day now.

Don't forget...

[Anonymous Coward]

To pay your $699 licensing fee!

Re:Don't forget...

[Anonymous Coward]

That way you won't get sued by SCO.

SCO Thinks...

[tanksalot]

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?

---

Re:SCO Thinks...

[SpaceLifeForm]

Certainly.

How would you know they could pay?

[astrashe]

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?

[fembots]

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.

Re:How would you know they could pay?

[tanksalot]

Psssst... hey buddy, come here... I got this great deal on linux insurance... not interested? hmmm, well how abaout this bridge?

Re:How would you know they could pay?

[advocate_one]

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

That's what people like these are for... you get them to assume the risk in return for annual premiums...

Re:How would you know they could pay?

[Anonymous Coward]

imagine how many life insurance companies went out of business or bailed out by the government because of 9/11.

None, I suspect. 3,000 deaths in a single incident is harrowing, but still only a tiny fraction of the total.

Re:Xtreme!

[Anonymous Coward]

"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.

Open Source Insurance - about time

[Old Wolf]

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.

In case you didn't get the acronyms

[dillon_rinker]

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

Re:In case you didn't get the acronyms

[Anonymous Coward]

wow, i always though FM stood for Fucking Magic.

Re:She's not a former editor yet!

[DjReagan]

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?

Warning: BLATANT PLUG

[cleetus]

This summer I had the opportunity to work for 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 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

Re:She's not a former editor yet!

[h00pla]

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.

Unfortunately

[Anonymous Coward]

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

Re:Unfortunately

[Anonymous Coward]

Mod parent *fucking* funny. Incase you dont get it ... "stephen king died today" is the second most popular troll

Good idea in my mind!

[MarkTina]

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!

[Anonymous Coward]

" 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.

Re:Good idea in my mind!

[Wun Hung Lo]

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. Thank you for the post, Mr. Gates!

Re:Good idea in my mind!

[MarkTina]

hehehe ... well having a % of his money would be nice ;-) I just like things to be done properly is all ... shame so few people and companies want to put the effort in to do it that way.

Re:Good idea in my mind!

[Anonymous Coward]

You think companies produce designs BEFORE they code?

Hahahahahahahahaha!
Hahahahahahahahahahahahahah ahahahaha!
Oh hohohoho!
Hahahaha!

OK, I'm done now.

Seriously...there's little difference between the code written by a kid who's only self-trained and the code produced thanks to managers who think they know more than the developers. Not to mention you'll find most open source code worth using is written by people well trained in development, who have the extra benefit of not having a know-nothing moron telling them what to do.

If you think being made by a company is some kind of guarantee of quality, you don't know much about this business.

Re:Good idea in my mind!

[Kphrak]

That's somewhat of a ridiculous comparison. If you're going to compare OSS and closed source methodologies, you should not do the equivalent of comparing a teen garage band with the New York Philharmonic. A better comparison would be "enterprise" closed source, versus open source that has a lot of manpower behind it.

The open source that tends to get used the most is the stuff that has a strong userbase and active developers. The 14-year-old-written "this is l33t so I wrote it, visit my blog d00d!@!@!!" kind of software is occasionally useful if you need something to do a small, handy thing on your workstation, but rarely gets used heavily in production -- even by workplaces using open source.

More likely, the software written is by some post-graduate or a group of programming enthusiasts who are interested in the program concept or have found it useful and decided to help improve it. Most of the GNU software, MailScanner (an extremely flexible virus/spam gateway), and the Linux kernel itself, is written in this manner. Many of them release designs and papers, something which the companies you're speaking of often keep in-house and hidden from the public.

Now to my personal mistrusts. I personally mistrust software that's probably written by someone with a passing familiarity with Visual Basic, who does not speak my language and does not document the program properly. If you wonder what I mean, try installing some of that "bonus software" that comes with your inkjet, scanner, or CD writer on your system and you'll learn a painful lesson. Not all software written by a company is good, or even has a reasonable design behind it -- and sometimes, even with a reasonable design it's still programmed badly.

Re:Good idea in my mind!

[MarkTina]

Well I know I do it, doesn't take much effort, and you just keep revising it everytime a good change comes to mind. It makes it easier so that if I get run over by a bus then Mark V2 can come along and quickly pick up where I was interrupted. People who don't do proper docs and designs are shoddy workers.

Worthless Insurance

[Anonymous Coward]

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.

Well HPs launching OS in China

[crovira]

This has a few more details. It looks like the OS that's O.S. is getting its licks in where it counts.

Why spend, or more likely rip off, an OS and productivity suite when you can get a legit one for free.

The PC got in because "Nobody even got fired for buying IBM" and then they gave away the hardware specs. (As opposed to the Amiga, TRS-80, Atari, Apple II et alia.)

Then M$ got in because "Nobody ever got fired for saving a buck." (The attack of the clones.)

It stayed in because Gates screamed "Make it more like the Mac" three(.one) times. (Remember Windows 1.0 or 2.0? He didn't stand a chance until he ripped off IBM [Man were they dumb!] for the GUI to OS/2.)

Now Linux is getting in because "Nobody ever got fired for saving even more bucks."

And screw the phoney IP "issues" with SCO.

Better links (less misinformation)

[Anonymous Coward]

http://www.osriskmanagement.com/about.shtml is pretty clear that Pamela Jones is staying with groklaw.

http://linuxpr.com/releases/6631.html is as well.

http://techupdate.zdnet.com/techupdate/stories/mai n/open_source_insurance.html doesn't mention PJ but is informative.

P.S. Apparently the SCO fee of $699 would buy $23,300 of OSRM coverage...which will include defending from attacks by SCO.

A couple of reasons

[DaveAtFraud]

Regular readers of Groklaw have a pretty good idea what PJ thinks of SCO's chances with their various lawsuits. I see a couple of different reasons why PJ and Bruce Perens would both (RTFA) be in on this:

1) Our dear friend Darl has made threatening noises with regard to Groklaw being on the side of whoever SCO is suing this week (e.g., IBM, Red Hat, Novell, Autzone, etc.). OSRM may provide PJ and the rest of the Groklawyers with a corporate vehicle to continue doing exactly what they've been doing without fear that Darl can go after PJ (in particular but also anyone else who contributes) in some sort of malicious (big $ personal lawsuit) way. SCO has amply demonstrated that their response to anyone who opposes them is to file a lawsuit (See SLAPP).

2) You will note that the first activity of this insurance company doesn't seem to be trying to sell an insurance policy. Its to offer a class "...on how best to mitigate the risk of using open source software". Any bets that a lot of that class will be on how to file the right paper work to legally tell SCO to go find an alien who can probe them until the existing SCO litigation is cleared up including deciding if SCO really does own the copyrights to UNIX? (Maybe Darl should look into that alien abduction insurance.)

Re:A couple of reasons

[One Louder]

SCO has amply demonstrated that their response to anyone who opposes them is to file a lawsuit (See SLAPP).

Whatever else SCO has done, they don't appear to be filing SLAPPs against their critics. So far they've just sued companies with whom they believe they have some sort of contract dispute, real or imaginary.

The only exception might be their suit against Novell for Slander of Title, but again, that's a very specific claim related to a contract.

So far, they haven't taken any specific legal action against Groklaw, Perens, or Moglen. They haven't even gone after the one person who who be most at fault if their public claims about Linux were true, Linus Torvalds, who would have been responsible for including the alleged tainted software in the kernel.

Re:A couple of reasons

[DaveAtFraud]

What you say is absolutely true but Darl has hinted in the last couple of interviews he has given that SCO is finding Groklaw to be a major pain in their backside. If you look at SCO's past behavior, this is exactly what they have done before their other suits. I wouldn't blame PJ for finding an appropriate vehicle like fouding a company offering "Open Source Liability Insurance" to shield herself from personal liability from a bunch of litiguous bastards like SCO.

(Not everyone can work that link into a legitimate post)

Re:A couple of reasons

[k_head]

They have publicly said that they intend to sue linus. I know they are liars and all but even a broken clock is right two times a day.

Professionalism

[Beek]

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

Shouldn't programmers be responsible for their work? If computer science is ever to be taken seriously as a profession, then that is one thing that must happen. Otherwise, they're just digital plumbers.

Re:Professionalism

[MarkTina]

Yes they should be .. the structural engineers of the world have insurance in case their design is flawed and kills people, so why not software "engineers" ? Software can accidently kill people just as easily (darn +/- symbols are so confusing ;-) Problem is software engineers these days just chop straight into coding with hardly a thought to designing what they want ... if a structural engineer turned up at a construction site and started to ad-hoc direct where things were to go how long do you think he would remain in a job ?

Jeez....

[tacokill]

"Software insurance doesn't fix any of the bugs that may be encountered, and shit^H^H^H^Hbugs happen"...

Man, I can't wait until Software Engineering actually becomes a more professional practice. Imagine what would happen if all engineering degreed people in the world said things like "shit happens" when something went wrong. While we all know shit really DOES happen, there is no place other than software design where that answer seems like a normal thing. Every other discipline does everything they can to make sure shit DOESN'T happen.

Not picking on the parent, it just reminded me of how young this industry is.

Re:Jeez....

[tomhudson]

Shit happens because engineers don't stress-test to all possible cases, because doing so is impossible. Shit does happen. This isn't just in the computer field.

Bridges fail.

The shuttle failed.

Cars fail.

Roads fail.

Medical devices fail.

Nuclear power plants fail.

"Failsafe" power grids fail.

Look at "mother nature". Your body, which has millions of years of evolutionary experience behind it, fails.

It's a good thing to remember that shit happens. When shit stops happenig, we're going to be SOOOO constipated ... :-)

"Former"?

[John Hasler]

> Pamela Jones, former editor of the popular
> Groklaw.net Web site...

Still editing as of half an hour ago.

and then they take your red stapler away

[sacrilicious]

And for good reason, imagine you write something that rounds up instead of down in the hundredths place for some output

... and the program goes nuts and you suddenly have hundreds of thousands of dollars in your account that you can't explain, and you're probably headed to Federal PMITA prison, and to top it all off you find out that Lumberg f*cked her. THAT's when you need insurance my friend.

insurance

[Anonymous Coward]

How does code-malpractice ("errors and omissions") insurance work? I mean, actuarial tables are pretty easily constructed in principle, for death and injury. But how is "programming skill" quantified for the purpose of establishing premiums?

Re:She's not a former editor yet!

[donnz]

Indeed. When she announced (a while back) that she had this new role one of the conditions was that she is able to devote time to the site.

That slut sold out.

[Anonymous Coward]

Fuck her. Stupid cunt. "Oh hey, let's make money by giving people bullshit insurance claims!"

Protecting yourself.

[e9th]

Even if you are a small developer, consider incorporating. A major screw-up on your part can still cost you your business, but it makes your personal assets much harder to go after.

eyecon0meter: like something va lairIE/robbIE

[Anonymous Coward]

/miguel would be tolled to dream up.

always some sort of phonIE hostage scam. eye gas that smells of the felonious payper liesense stock markup FraUD execrable fuddites too.

too much is never enough for sum phonIEs. lookout bullow.

PJ is still editor

[burgburgburg]

At least, as of this morning.

Sigh

[0x0d0a]

It's great to see PJ get work deriving from her blog and research (and she darn well deserves it), but it does put her in a position where she *has* to have some kind of conflict of interest.

Re:Sigh

[Ohreally_factor]

Not really. Depends on what she is doing for them. I suggest you visit the OSRM website yourself and find out.

Linus works for companies, and no one accuses him of conflict of interest. When he gets that Nike endorsement deal, though, I'm going to call him a sell out.

Smells fishy to me

[cgreuter]

This sounds like a hoax to me. PJ continues to post articles to Groklaw so I don't think she's the former editor. I also haven't heard anything about this venture from there, nor has she been particularly enthusiastic for OSS indemnification in the past.

I could be wrong, but for the moment, I'll hold off taking them seriously.

Excellent news for open source x 2

[0x0d0a]

On top of that, it means that some company is going to be making lots of money from open source.

The downside is that they have every incentive to blow up the risk of using open source software.

The upside is they also have every incentive to fight anyone like SCO that's suing people.

There's always someone looking for free money...

[Kjella]

SCO is trying to get free money using some incredibly bullshit claims.
These are trying to get free money using some bullshit protections.

Pardon me if I feel you don't need neither SCOs licence nor this OSS insurance.

Kjella

How do you draw the line?

[zurab]

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

Here's a hypothetical scenario:

- You buy a jar of mayonnaise made by Kraft
- Kraft gets sued by SCOMayo (whatever) for infringing on one of their patents on how to make mayonnaise that stays fresh for up to 12 months and loses
- SCOMayo now sues everyone who ever bought and stored the patent-infringing mayonnaise from Kraft and demands additional $6.99 for every jar of mayonnaise purchased?

IANAL, so I don't understand how this works. Can SCOMayo sue individual people and sandwhich shops, fast foods and restaurants for patent infringement? If so, maybe they should start selling indemnification insurance at the supermakets as well for an extra $0.99 per item ($0.88 at Wal-Mart)?

On a more technical side, would this mean that because I own 3 nVidia video cards I may get sued by ATI and I need insurance just in case? Where and how is this line drawn, if there is one?

Re:How do you draw the line?

[molarmass192]

IANALE but here's a great site put together by lawyers: chillingeffects.org

Looks like the answer is yes but the court determines how much SCOMayo gets, not SCOMayo.

Re:How do you draw the line?

[zurab]

IANALE but here's a great site put together by lawyers: chillingeffects.org

Looks like the answer is yes but the court determines how much SCOMayo gets, not SCOMayo.

Quote from the referenced site (emphasis mine):

Question: What does it mean to "infringe" a patent?

Answer: If you are accused of patent infringement, you are accused of having made, sold or offered for sale an invention described in one of the claims of a valid patent, without the patent owner's authorization. ... Note that you may be liable for inducing infringement or contributing to infringement, even if you did not directly infringe a patent, if you encourage or assist someone else to infringe a patent.

Note that this explanation does not cover the use of the pre-made/bought patented invention, but only making, selling, or offering for sale. That part is clear to me. What I am wondering is how this affects the use of the patented invention.

Because the way I see it is that if someone sold you something, and you bought it legally and in good faith, there's nothing a patent holder can do about it other than go after the party that "made, sold or offered for sale" the invention.

Where am I wrong?

Re:How do you draw the line?

[bladernr]

Because the way I see it is that if someone sold you something, and you bought it legally and in good faith, there's nothing a patent holder can do about it other than go after the party that "made, sold or offered for sale" the invention.

Perhaps, but as soon as you know it is illegal, you may be required to stop using it, or face legal consequences. That could hurt your business.

Consider the situation of accidentally buying a stolen item. You will probably face no consequences as long as you immedatly return the stolen item (of course, you lose what you paid). You do not get to say "Hey, I didn't know it was stolen", and then assume you have ownership.

Re:How do you draw the line?

[zurab]

Consider the situation of accidentally buying a stolen item. You will probably face no consequences as long as you immedatly return the stolen item (of course, you lose what you paid). You do not get to say "Hey, I didn't know it was stolen", and then assume you have ownership.

As I pointed out in response to a previous /. story, this is not true in the U.S.. Most (all?) states have passed the UCC (Uniform Commercial Code) which says that if you buy an item legally and in good faith, you become the legal owner of that item, even if it turns out to be stolen later on. So, the victim can go after the thief directly. Have a look at my previous comment for the UCC reference.

Anyway, if we went along with the UCC's good faith purchaser provisions, then patent holders wouldn't have any claims against actual users (only against makers and sellers).

Re:How do you draw the line?

[Anonymous Coward]

There is something wrong with that. IANAL either, but I am familiar with a number of situations where a customer purchased a used car "in good faith" from a legitimate used car dealer only to find that the car was originially stolen (and the used car dealer was unware of that status and had followed all legal requirements). The customers were left holding the bag, the FBI confiscated the cars and returned them to their original owners.

Re:How do you draw the line?

[zurab]

Well, I don't know the specifics or what cases you are referring to, but just because FBI or police do something different doesn't mean that the UCC does not stand. In fact, I'd be extremely surprised in cases where a judge said that UCC's good faith purchaser provisions are invalid; because, AFAIK, that would be a major change in the state law as it stands right now.

When it comes to the patents, I found some info on what constitutes an infringement in the US Code Title 35:

(a) Except as otherwise provided in this title, whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States or imports into the United States any patented invention during the term of the patent therefor, infringes the patent.

This means that even if you use a patented invention without permission and you are a good faith buyer, you are still infringing. This seems fundamentally unfair to me and goes against the spirit of UCC's "good faith purchaser" provisions. Patent law being the US Code, it will override whatever is in the UCC.

Open Source's legal record

[0x0d0a]

Does your company use contractors?

I've a rather low opinion of the trustworthiness of traditional contractors and subcontractors. They aren't dumping their code in a repository that the world can see with a neat little per-person log and claiming "I wrote this", so stealing code is much more attractive for them -- the risk must appear lower.

I've yet to hear of a major open source project exposing a company that decided to use them to liability through the project's use of illegal code, like Apache swiping code from someone else, say.

As a matter of fact I believe all of the Open Source related cases I've seen where soemone was demonstrated to be in the wrong are where someone (generally a closed-source company) illegally uses software from a major *open-source* project. MPlayer is a popular source to steal from, as well as Linux (for embedded systems).

Open Source doesn't deserve a whit of blame for these cases. These are traditional closed-source companies violating law (and makes me suspicious that this sort of thing may happen much more frequently between projects that are mostly closed-source but someone manages to get access to than OS projects). Open Source people that I've interacted with are some of the *most* upstanding when it comes to following licenses correctly, simply because licenses play such a big role in the Open Source world.

Re:Open Source's legal record

[bladernr]

Does your company use contractors? I've a rather low opinion of the trustworthiness of traditional contractors and subcontractors.

I work for a consulting company. One of our larger expenses is liability insurance, and we carry loads of it. I head up a practice, and I am very careful to protect confidentiality of clients and their IP. I work for companies that compete with each other, so I have to be very careful about keeping these walls up. I wouldn't generalize that contractors (such as consulting companies) are any more or less scrupulous than the business world at large.

Open Source people that I've interacted with are some of the *most* upstanding when it comes to following licenses correctly.

I think engineers in general are upstanding. It is perhaps unfair to compare open-source to closed-source engineers. Many engineers I know in the closed-source world I know also contribute to OSS.

I am one of those realists that believes a fair amount of infringement is happening all over the software world. I'm not terribly pleased with it, so don't think that I am defending it, but software has had a very lax attitude toward this (unlike, say, pharma, that takes IP seriously).

Back to the topic, I think insurance is a great way to manage risk. I feel that I am more liable in OSS, because I have the ability to know (because I get the source) where, in closed-source, I can always plead that there was no way for me to know, because my license agreement specifically forbids reverse-engineering, among other things, and I don't have the source. This insurance gives me a way to mitigate that risk, although it does eliminate part of the cost-justification of OSS.

Re:Open Source's legal record

[0x0d0a]

I suppose I should slightly rephrase what I was saying.

My main problem comes in when company A hires contractor B, and contractor B looks for the lowest-cost subcontractor C to do work. Sure enough, subcontractor C has little disincentive to swipe code from somewhere.

I agree that a significant amount of infringement happens, but I still think that Open Source code is less likely to contain infringement (including commercial open source work) -- people that work on such a project know that their code is going to be visible to and exposed to the world, and that any illegality is easier to find.

There is a valid point that infringement on the part of closed-source software is harder to find, and so perhaps you might manage to license closed-source software that isn't legal and get away with it, whereas you could license open-source software and have people find legal problems with it more easily. However, in general I'd say that OSS is cleaner of legal issues than traditional closed-source software.

Re:Open Source's legal record

[Anonymous Coward]

I've yet to hear of a major open source project exposing a company that decided to use them to liability through the project's use of illegal code, like Apache swiping code from someone else, say.

Don't think it doesn't happen the other way around, either. We actually had a employee who incorporated some GPL code into a proprietary codebase. Stripped off the headers, so he obviously had some idea about what he was doing. Fortunately, some comments he left in the code tipped us off. We caught it just before we went into our release cycle, so a couple of more weeks and we would have shipped a GPL-violating product.

This was in a company that used (and still uses) OSS extensively, where we were all pretty well educated on various license issues, and the (now ex-employee) should have known better than to try this sort of thing.

We later found that co-workers of his were using our products to start a consulting buisiness catering to competetors, too - and operating the whole thing out of one of our remote offices. We decided that the GPL code was done out of simple laziness, thought it did cross our mind that a competetor might have "funded" that code ending up in our products, just so they could spread some FUD.

It's not bugs that are the issue

[mdfst13]

Bugs aren't the issue with this insurance. IP claims are the issue. It doesn't insure against bugs; it insures against someone making a patent or copyright claim against you. It also agrees to fight the claim in court and to pay various damages from complying with a court order. One use would be anti-SCO insurance, but it seems that they are really more interested in being an anti-Eolas insurance (patent claim).

Even with the malpractice insurance that is mentioned by the /. headline (but is not the subject, just an incidental), buggy code is less of an issue than damages caused by buggy code. For example, if your buggy code deletes their customer database, then the malpractice insurance would pay to recreate it from hard copy.

Btw, even if you refused to code without insurance (which you are not forced to do; you are in no way required to get the malpractice insurance to code), it is normally a slow process to get insurance cancelled (not to mention that it normally takes more than one claim). You would generally have plenty of time to fix the software prior to losing the insurance.

I am fairly sure that Microsoft would prefer to release bug free code. However, for some reason, they have never done so. Bug free is a great (albeit unreachable) target, but it's not like not buying malpractice insurance will make software bug free. Otoh, having damage insurance can help a company weather a major bug that interferes with day to day operations.

Re:It's not bugs that are the issue

[tomhudson]

Well, you have a point there - I rushed to reply to a side-issue instead of the main topic.

On the other hand, insurance companies are now cancelling insurance after one claim. It was an election issue in one of the Atlantic provinces - they were also refusing to insure vehicles more than 9 years old, even if the person had a zero claims history. All they had to do was send you a registered letter telling you your insurance was cancelled 10 days from that date. Things have changed post 9/11 :-(

If the customer was sloppy enough not to have a policy of regular backups, I don't think any insurance would pay to recreate the data from hardcopy. That's just negligence on their part.

Also, the time spent recreating data from hardcopy would put most companies out of business anyway :-(

Mind you, I remember one customer who kept his backups in a safe place - just that it happened to be next to a 600-volt electric motor. When he actually needed them, they were pretty much scrambled. His paper records were also useless. A couple million dollars of leasing contracts gone. Fortunately, I was able to recover the raw data over an Easter weekend. Triple-time is a good thing.

Dont Laugh

[nurb432]

In this sue-happy society today, this sort of thing just may keep you from going bankrupt due to some nobody trying to get a piece ( or all ) of your action.

Regardless of the outcome of the suits, they may ruin you in the process of defending yourself. And if you DO loose, you are screwed.

This is not much different then most any other industry...

Though if it becomes more widespread it will drive up the cost of IT, and put a lot of small timers out of business that cant afford it.. ' well sir, you arent bonded nor insured, we must choose another canditate for our contract' ( I have personally lost a couple of potential contracts due to that exact reason )

Obligatory (maybe) Family Guy reference

[Noah Adler]

Lois: "Peter, did you take the money from the family jar?"
Peter: "Who me? Couldn't be! Then who? Yeah I did it. I used it to buy volcano insurance!"
Lois: "Peter, that's ridiculus!"
Peter: "That's the same thing you said when you talked me out of buying that cloud insurance. Look at 'em up there, just plotting."

I'll tell you what's next...

[PhxBlue]

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

How about dupe, disinformation, and/or typo insurance for Slashdot editors? :)

If you think you need that....

[Anonymous Coward]

...I'll sell you insurance against the possibility of your head spontaneously imploding.

Don't put up a beware of dog sign

[Stone316]

From what i'm told its like an admission of guilt. Your telling people that you think the dog may be unsafe to be around.

I know, doesn't make sense but i've heard this repeated over and over.

Re:She's not a former editor yet!

[rjamestaylor]

I think if PJ were truly the "former editor" of Groklaw that would be a news story, or 7 (this is slashdot) by itself!

Yikes!

In other news, God, former creator of the universe...

Good Point

[plopez]

And that's a majort difference between an ENgineert and a technician. A professional Engineer (PE) assumes liability for his/her actions. A technician is a grunt doing what they are told and the liability is covered by the employer. So-called Software Engineers or Certified Engineers will never get any respect until they are willing to shell out the money for insurance for errors and omissions. Until THEY are willing to assume some risk, and put professional creditials, personal welath and reputation on the line.

One reason software is in such bad shape, is that despite all the bluster creating software is still an unprofessional craft, at best. And the industry does NOT want to change this at all it seems. Another reason I desperatey want to get out of IT>

Alien Abductions Incorporated

[jonesvery]

Okay, I've got to mention it...

Why spend the money on alien abduction insurance when you could just invest it in an AAI Abduction Experience and find out whether you'd actually like being abducted by aliens?

Can't beat the company motto: If they won't contact you, contact us!

...and hey, if I start getting traffic to it again, maybe I'll get around to updating the site again one of these days... :)

"former" ???

[mikehunt]

Since when did PJ stop being the editor of Groklaw?

OSI

[_ph1ux_]

Not what i expected to hear when I heard "Open Source Insurance"

How about the following model for open source insurance.

Get a group of a couple hundred people together - all within a couple of degrees of eachother. Blue book eachothers cars - then all pay into an investment fund a set rate each month for auto or other insurance. Not into an insurance policy with some other carrier - but an actual investment/savings fund.

Take an umbrella policy out on the whole investment for an extreme case, and pay for that policy out of the combined account. If there is an accident that requires payment over a certain percentage of the value of the fund - then you leverage the policy from some insurance carrier that you have purchased. But, if at the end of the year there are no accidents - the investment OSI can pay a dividend on the money paid in and invested.

All other insurance companies operate this way - but here is a community based insurance. The big guys are just investment companies that take otehr peoples money to invest with in leiu of paying them off if something should happen to them or the property that they are esentially using as an asset backing to the investment. In the sense that the maintaining of the well-being of the object is the incentive for the person to pay to insure its well-being. and in the case of auto insurance - this investment revenue is guarenteed by law.

You must have insurance on your vehicle regardless of whether you have been in an accident. and if, at the end of the year - you dont get into an accident - you do not get any return on your contribution to the insurance companies investment.

heh

[TechnologyX]

When I first read that subject line, I thought that someone had devised a plan to have Open Source insurance, as in car or homeowners insurance.

Which made me think, I wonder if the FOSS philosophy could be applied to things like, say, car insurance.

not just for *getting* sued

[flacco]

insurance can also play a role for those companies worried about "not having someone to sue" if their Free software gives them problems.

a software insurance outfit could evaluate the risk posed by faulty software and insure the company. this is actually better than "having someone to sue" because that someone could go belly-up (which they probably would if their proprietary software sucks nuts hard enough to inspire lawsuits). even if they didn't, much of the wealth would be siphoned off by lawyers orchestrating the legal slap-fight.

I agree with part of this...

[rockabilly]

I agree that it would take money away from SCO, but insurance companies like this one THRIVES on companies like SCO to sell their product. For example, if it wasn't for the threat of fire, there would be no reason to buy fire insurance.

Who knows, (start of conspiracy theory) this could be part of the Canopy Group's 'master plan'. Canopy could be backing this, so whether you deal with SCO at $699 or buy insurance for x # of $$, Canopy could be laughing all the way to the bank...

DO NOT LET THIS HAPPEN

[EmagGeek]

look at what happened to drivers and physicians who let lawyers and insurance companies start corrupting everything!

Yes, you WILL have to carry code malpractice insurance, and it will consume more than half of your income just like malpractice insurance does for doctors.. and just like a lot of car insurance payments are half of the payment on the car itself!

This is BAD... very bad...

Re:DO NOT LET THIS HAPPEN

[Anonymous Coward]

I'm sorry, but I don't understand what you are basing your "WILL have to carry" conclusion on. Open source projects are a volunteer effort - there is no government agency registering coders like drivers and doctors. Wouldn't that have to happen for your prediction to pan out?

???

Re:DO NOT LET THIS HAPPEN

[Ohreally_factor]

Didn't you hear? The Department of Motor Vehicles is now handing out Gnu Public Drivers' Licenses.

Re:DO NOT LET THIS HAPPEN

[EmagGeek]

Just because you do it for free doesn't mean you can't be sued when it doesn't work as advertised...

It's the wrong way roung

[caluml]

It's not open source insurance people need. It's closed source insurance.

Insurance fraud = PITA prison time

[Anonymous Coward]

People try to defraud insurers all the time - arson on your home, self-inflicted injury for disability payouts, etc. - so this would be nothing new.

And people are discovered doing this and send to federal PITA prison all the time. If you're smart enough to code, you're smart enough to realize just how badly trying this kind of scam can get you f*cked.

First week of February was when this happened

[Hal9000_sn3]

According to news release on riskmanagement.com NEWS, the hiring of PJ happened first week of February. Also see this article

Eben Moglen talked about this very thing

[hetairoi]

in his speec at Harvard awhile back.

Full text here

"If you are thinking about working in the law of free software, and gosh, I hope you are, one of the things you might want to be thinking about working on is the software conservation trusts that are going to be growing up around this economy in the next five years. I'll help you make one, or you can come to work in one of mine. We're going to need to spend a lot of time doing work which is associated with trustees. We're going to be spending a lot of time making sure that things are put together and they are built well. And we are going to be doing that on behalf of a third-party insurance industry which is going to be growing up, is growing up before our very eyes now, which is learning that it really cares how the free software is assembled."

Inaccuracies @ Infoworld

[rixstep]

The Infoworld article called PJ a 'former' editor.

Yeah right. From today's GL:

I've been getting inundated with email, asking if Groklaw will be shutting down, thanks to an article in InfoWorld that identified me as the "former editor of Groklaw". That is inaccurate. I am still the editor of Groklaw, and my work with OSRM is separate from it. My contract is written so as to ensure my having time to do Groklaw. I have always done paid work in addition to Groklaw, so this isn't anything new.

The article said that SCO didn't sound displeased to hear the news. Not that I wish to throw cold water on anyone's pleasure in Lindon or anything, but Groklaw isn't going anywhere.

Uh huh.

[ScrewMaster]

And how much do you want to bet that when the smoke clears we find Microsoft behind this little "initiative" as well.

Buy insurance instead of product or services?

[totierne]

Why not ensure against data loss, security laps and downtime, let the insurance company work out the odds based on your own best practices, and the programs involved. Say cheap insurance for apache, and FreeBSD, and higher insurance costs for linux , jboss and IIS.

Everyones a winner, it gives an objective measure of the liability of running open source or indeed any computer system.

It may even go full circle where the insurance company pays to improve the software to reduce its pay outs. Most likely end up as more greased palms of lawyers.

Better solution, make suing expensive

[TekGoNos]

Today, suing someone costs you nothing.
If you loose, you pay nothing.
If you win, you pay, but you get more.

However, getting sued is expensive.
If you loose, you pay your lawyer + the plaintiff.
If you win, you still pay your lawyer.

A solution would be to make suing expensive.
If you loose, you'd have to pay all legal expenses of the defendant.

So the system would be :
If plaintiff wins, he pays his lawyer, but gets more.
If plaintiff looses, he pays the defendant's lawyer.
If defendant wins, he pays nothing.
If defendant looses, he pays his lawyer + the plaintiff.

As suing can suddenly become very pricy, the whole attitude to lawsuits should change and people would actually evaluate the situation before suing.
It would still allow people to sue "for free" if they win their lawsuit. But it should stop these "snowball-chance-in-hell, but suing anyway, just in case I got lucky with the jury"-lawsuits.

Re:Better solution, make suing expensive

[Tokerat]

The problem there is when you've got Joe Discount Lawfirm and the defendant gets Johnny Cochran. You lose, you pay, and they where at fault but had a slick lawyer? Hmmm...

Re:Former Editor?

[ErichTheWebGuy]

Nah, she's still in.

"I've been getting inundated with email, asking if Groklaw will be shutting down, thanks to an article in InfoWorld that identified me as the "former editor of Groklaw". That is inaccurate. I am still the editor of Groklaw, and my work with OSRM is separate from it. My contract is written so as to ensure my having time to do Groklaw. I have always done paid work in addition to Groklaw, so this isn't anything new."

More Than One Way to Skin a Cat

[Anonymous Coward]

> ... begin offering insurance policies to
> companies using open source software but
> fear that they may be sued,

I guess these are the kind of crazy things
you should expect when you can't actually
make money from selling the software.

Developer1: We can't make any money off of our
GPL'ed software ! :(

Deveolper2: Yes we can, we'll just sell an
"insurance" policy that's says our software
is "safe" to use ! :)

Re:Warning: BLATANT PLUG

[Ohreally_factor]

That sounds great. I think your product would be a good fit with the service offerings of OSRM (which, as I'm sure you know, is NOT an insurance company).

Where did you come up with this?

[Ohreally_factor]

1) I don't remember hearing anything about Groklaw coming under any corporate umbrella. I don't think my employer (if I had one, heh) would provide me with any legal protection for one of my personal websites, either. OSRM has hired PJ with the proviso that she be allowed time to continue her work on Groklaw. As far as I know, that's it.

2) I don't think OSRM is an insurance company. Of course, when we can't even expect slashdotters to RTFA, can we expect anyone to visit the OSRM site to find out what they really do?

Re:Where did you come up with this?

[Ohreally_factor]

My bad. I did some more research, and while the site does not have any press releases concerning offering insurance, they have links to articles that mention that Peter Eggers is in talks with underwriters. So, at some time in the future, they might be offering insurance or brokering insurance. Or they might be structuring themselves as a trust, as Eben Moglen has talked about.

Re:Xtreme!

[emo boy]

I think you're right. It's all about the kill count. I mean even columbine couldn't get more than a handful which was short of their expectations. I mean shit...in State of Emergency you could kill at least 500-600 people in ten minutes. Where's the standards people? Where are the STANDARDS???

"Public Liability" and "Professional Indemnity"

[quinkin]

I'm not sure on US law, but in Oz it is "Public Liability" and "Professional Indemnity".

They are two distinct areas of insurance. Public is to protect you if a visitor (non-employee) trips over in your office and breaks a leg. Professional is for when you fsck up (as parent said - data loss, etc).

That said, when I was establishing my IT company it was astounding how many traditional insurance firms would outright refuse to insure us. They wouldn't demand overzealous premiums, but flatly refuse to insure IT startups.

There is more than enough demand for this, if Pamela can keep them afloat (she's got the skills) then it will benefit us all.

Insurance sucks, but not as much as being sued...

Q.