Lloyds of London to Offer Open Source Insurance

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.'"

Comments

Re:Smart Move?

[meringuoid]

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...

Doesn't this suck?

[visualight]

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?

Re:But when can we get tiger-attack insurance?

[jesterzog]

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.