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Well, if the insurance is not looking for an excuse to go bankrupt they’ll survey the existing setup and either refuse to insure or ask an astronomical premium.
by eecc 6y ago
Well, if the insurance is not looking for an excuse to go bankrupt they’ll survey the existing setup and either refuse to insure or ask an astronomical premium. The infrastructure operator will then negotiate a compliance progress plan to reduce the premium down to an affordable amount.
I’m not saying there aren’t other mechanisms to pervert this model, but as a first approximation this is how’s it supposed to work: as long as the operator is forced to buy insurance, and there’s no way for the insurance to get off the hook, parties are forced to develop a credible risk assessment and mitigation.
- AnthonyMouse 6y agoHere's the failure mode: The insurance company comes up with some prohibitively expensive and not cost effective at all requirements that would work (but bankrupt you) if you actually implemented them. Someone at the company feigns compliance with the rules. Then, if there is a claim, the insurance company investigates whether you followed the rules, finds that you didn't, and denies the claim. The insurance company doesn't go bankrupt and doesn't care that this happened. But most of the time there isn't a claim so nobody on either side actually notices that this is happening.