On insurance vs regulation - What isn't being mentioned here is that insurers will require insured companies to do a bunch of stuff in order to remain insured.

On insurance vs regulation - What isn't being mentioned here is that insurers will require insured companies to do a bunch of stuff in order to remain insured. Have some processes in place, do some things, and so on. Just like your car insuruance isn't valid if you drink and drive, your software company insurance might not be valid if you aren't using source control and have no testing or code review proccess. So in some ways, what you get out of insurance is market driven 'regulation'. Possibly, because a rival insurance company can impose different conditions, insurers are incentivised to require only the stuff that really reduces risk, while regulators might make irrational regulations driven by moral panics in the press. Similarly, they might be more responsive to supporting new technqiues that reduce risk at lower costs, because customers will seek out an insurer that lets them use those. Possibly, insurers are less suceptible to moral hazard, where regulator employees have close relationships with industry heavyweights and make policy that helps their buisness, at the expense of consumers and sector rivals. Insurers mostly want to make money. Regulators might be better sometimes because their staff tend to be very mission driven (they want to fix the problem, not make money). They will get a kicking from the public if there is a big accident and laws and regulations did not prevent it, while an insurer is only punished if they don't satisfy current law. So a regulator might be more proactive.