

Ask HN: Software Patent Lawsuit Insurance for Indy Devs? - siglesias

It occurred to me in light of the recent spate of litigation against small developers that there should be some kind of software patent lawsuit insurance. Failing that, perhaps a service that allows developers to pool money in case one of them gets sued? Do such services exist, and if not, why?
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michaelpinto
I'm not an expert but the only thing I've seen like that is Errors and
Omissions insurance:
[http://www.insurepro.net/html/errors_and_omissions_explained...](http://www.insurepro.net/html/errors_and_omissions_explained.htm)

"We generally recommend Errors & Omissions Insurance be at the foundation of
every company’s insurance portfolio. Usually it is wise to purchase the
coverage prior to product launch, or when you have customers. It can be
required by investors, particularly VC’s."

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JoachimSchipper
In general, insurance makes a lot of sense when the events that are insured
against are catastrophic and statistically more-or-less independent. Health
insurance is the canonical example.

Insuring against events that are likely to occur to every insurance holder
simultaneously is much more difficult. AIG, for instance, collapsed when lots
of people called in their "mortgage value insurances"; a more paranoid
underwriter would need to sit on a huge pool of money until something
happened.

Other constructions are possible, but a patent troll targeting one small
developer is likely to target so many small developers that actually fighting
all those lawsuits would bankrupt everyone. You'd need a few big fishes in the
pool to absorb those kind of shocks, and I think the Googles of this world
prefer fighting their own battles.

