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Lloyds of London to Offer Open Source Insurance

Posted by CmdrTaco on from the stuff-to-read dept.

darkworm writes "Lloyds of London, the world's oldest insurance house, is to offer indemnification for IP litigation worldwide according to the Channel Register: 'Lloyd's of London is close to offering independent insurance protection worldwide against potential IP litigation involving Linux and open source software. The financial services giant has agreed to take on the risk associated with open source, and is finalizing arrangements to work through Open Source Risk Management (OSRM) who will become Lloyd's sole U.S. representative.'"

7 of 135 comments (clear)

  1. Re:Smart Move? by meringuoid · · Score: 4, Insightful
    Considering things really havent been truly tested, one bad judgement could cost billions..

    Actually, this is a really positive sign. Lloyds of London know all about risk. They've watched the SCO circus go around and have concluded that

    - SCO don't have a leg to stand on
    - However, they've made some people think there's a risk
    - Sell insurance
    - Profit!

    This is not quite as much a case of free money as the insurance policies you can buy against abduction by aliens, but it's pretty close...

    --
    Real Daleks don't climb stairs - they level the building.
  2. Doesn't this suck? by visualight · · Score: 4, Insightful
    If a company has insurance wouln't that just make it more likely for them to get sued?

    "There is a risk, but it's a material risk," Egger said of Linux and open source. "We are trying to make sure we are not exposing corporates to risk that makes using Linux uneconomic."

    Or would the insurance company put up a good fight in court and maybe make suing companies that use Linux uneconomical?
    --
    Samsung took back my unlocked bootloader because Google wants me to rent movies. They're both evil.
    1. Re:Doesn't this suck? by FidelCatsro · · Score: 2, Insightful

      It is most defiantly against the interests of an insurance firm to pay out on claims , and they will do all within their powers to stop it , or delay it long enough to cover the costs of the claim via trading and general interest rates acquired through the policy .
      Insurance is gambling , but a rather accepted and certainly in most cases a sensible form of gambling .
      Perhaps its the most successful form of gambling in the world , that or the stock market .

      You get protection in the off chance that something unfortunate happens , and they get to rake in billions upon billions . They would not be offering this insurance if they thought that they would have to pay out on a lot of claims .

      --
      The only things certain in war are Propaganda and Death. You can never be sure which is which though
  3. Former cases of coverage include... by D4C5CE · · Score: 2, Insightful

    ...the Titanic - so from an insurer's point of view, it makes perfect sense to ascertain they bet on something that's really unsinkable this time.

  4. Re:But when can we get tiger-attack insurance? by jesterzog · · Score: 4, Insightful

    I think the article sums up this area quite nicely:

    Arguably, one of the worst-case scenarios is the so-called "colorable case" - where there is no substance to an IP claim, but a company is forced to waste millions of dollars to defend the claim or settles early for a large sum to make the case go away. The average US patent action is estimated to cost $2m, according to the American Intellectual Property Lawyers' Association.

    I'm glad the author included this note. It indicates quite clearly why a lot of companies see it as being so important to be cautious of lawsuits. It's not the possibility of losing that matters, it's the cost of fighting. If the cost of fighting is more than a company can afford, it just make sense to settle, and then the overly litigous company wins. Even enlightened CEO's often want indemnification--not because they think a company like SCO has a hope of winning a lawsuit, but because they're concerned about how much it might cost if they're even targeted.

    Personally I think there need to be some changes to the system so that those who abuse it in this way are penalised much more, and also more quickly. The fact that SCO was both able to be so noticed in the first place, and can even continue dragging its corpse around today to threaten people with its stench without the likelihood of serious charges being brought against it, its executives or its legal team, suggests that not quite enough measures yet exist.

  5. Makes sense... by Adult+film+producer · · Score: 2, Insightful

    These guys are always looking for ways to make money... how much risk would be involved in this endeavor ? That would be the first question they would ask, I would guess... Would Lloyd's involve themselves in a high-risk investment? If anything, this move shows how much faith they have in the GPL+all oss licences .... It's a good thing in my opinion... they could care less about how it benefits society, as long as they're making money from it.

  6. Could be good or bad... by Anonymous Coward · · Score: 3, Insightful

    This is really about those companies who want to use open source software in their products (because it's free) but are scared someone might sue them, a risk which isn't really quantifiable. These guys can be pretty greedy and dumb.

    My company, for example, won't touch anything with GPL or even LGPL, even though at least LGPL is supposedly targetted (among others) towards companies wanting to use FOSS stuff in commercial products. The reason they're so paranoid is that a) their legal department's default position on anything they don't understand is to say no and b) they're afraid of one of their competitors, wearinng a rubber Richard Stallman mask, might sue them. (by this I don't mean that Mr Stallman himself would be involved, just some front organization)

    Now the 'good' is that these firms might get this service and suddenly find some balls when it comes to adopting FOSS technologies, so wider adoption for FOSS in the commercial world.

    The 'bad' is that they might take this further than the community intended or is comfortable with. Commercial development houses like free software in principal, it is software they don't have to pay to have developed themselves. Given blanket protection, they might start pushing the limits of the licenses, getting as much as they can. If the little guy was scared to sue Sun or whoever, immagine how scared they'll be to sue Lloyds, who let me tell you are one old, mean firm, no strangers to a courtroom. Right now the onus of complience with FOSS licences seems to effectively lie with the software houses, for whatever reason. What if this insurance made it so that the onus for proving someone has violated your licence became the FOSS developer's problem? Could make these licenses de-facto unenforcable...