The relatively low (and I have to tick boxes for most of the high risk industries on the form) amount that I pay each year for what seems to be a nice PI policy is easily worth it for the peace of mind.
I would too I think, if I lived in the US. But the culture around law in Poland is pretty much opposite of the US. People just aren't lawsuit-happy, probably partially because the courts are inefficient and you can wait a long time for a verdict, and partially because the courts often don't award that much in those verdicts (and those absurd multi-million verdicts for trivial things that are a thing in the US would never happen here). Here, I've never heard of a software contractor even being sued by a client, let alone lose and have to pay anything - and I've been in the game for 20 years. First time I hear it does happen, I'll reconsider getting a better policy.
The requirement for the policy some clients have are only there because they're multinationals and it's a company-wide policy. Local clients never expect contractors to have a policy.
Yeah, that's fair too. Admittedly my work puts me into contact with relatively litigious parties.
I think at my current premiums I would need to pay insurance for 100 or 1000 years to even get close to the sort of numbers that get thrown around for a day's worth of damages on some of these projects.
The likelihood is absolutely that nothing serious will go wrong, that if it did it wouldn't make it to the courts and furthermore that if it did it wouldn't be negligence of any kind, or was covered within the contract itself.
But the thought of having skipped out given the possible consequences; No thanks, value my sleep too much.
As things are now, I'm mandated to spend $XXXX/year on insurance that I've never used and know, for a near certainty, that I'm never going to use. I'd really rather not. I've looked at the statistics and, for me, it's a better bet to eschew insurance. (Which, generally speaking, it would have to be, otherwise the insurance industry would be losing money.)
I don't want to make any claims, though. I'd be much happier in a position where I'm totally unable to make claims. (And don't have to deal with the insurance industry.)
I'd even pay good money for (de facto-) fake insurance, just so mandates and overly-bureaucratic clients/partners leave well enough alone.
I think you're missing the point of why these "overly-bureaucratic clients" are insisting on insurance. I don't want you to have insurance to keep you safe, I need you to have insurance to keep me safe. When the widget you built for me breaks and damages my customer and I end up owing them €1m, I want to be able to recoup at least some of that cost from you. It won't be you making a claim on your insurance, but me (or rather my insurance company)
And as someone who used to be at one of those "overly-bureaucratic clients", we not only required (and checked) that you had insurance, but also that your insurance coverage was actually high enough for project in question.
> When the widget you built for me breaks and damages my customer and I end up owing them €1m, I want to be able to recoup at least some of that cost from you.
I'm not sure that follows.
I build something, send it to you. You integrate it, test it, make it production-ready, and ship it. If something breaks in testing, that's pretty normal, and it would be on me to fix -- and presumably contractual agreements would preclude damages at that stage.
If something breaks after you ship it to your own customer, that really ain't my responsibility. If you try to make it my responsibility, it would be a matter for the courts and not a matter for insurance. If you're looking for a quick payout from insurance, or if you think that insurance companies are less motivated to defend claims in court, that's reasonable -- but it's by no means necessary, and certainly not a social good. Insurance sets up incentive problems that ought to be avoided.
it would be a matter for the courts and not a matter for insurance
The specifics of the contract is besides the point. Taking you to court is meaningless unless you also have insurance, since if you're a freelancer or small company there is no way to get any money out of you. You'll just declare bankruptcy and be on your way and we'd still be stuck with the bill, even if it was you that screwed up. You having insurance is insurance for your customers that they have some chance of recompense if you screw them in some sort of way.
The relatively low (and I have to tick boxes for most of the high risk industries on the form) amount that I pay each year for what seems to be a nice PI policy is easily worth it for the peace of mind.