Software Liabilities and Free Software
Whenever I write about software liabilities, many people ask about free and open source software. If people who write free software, like Password Safe, are forced to assume liabilities, they will simply not be able to and free software would disappear.
Don’t worry, they won’t be.
The key to understanding this is that this sort of contractual liability is part of a contract, and with free software—or free anything—there’s no contract. Free software wouldn’t fall under a liability regime because the writer and the user have no business relationship; they are not seller and buyer. I would hope the courts would realize this without any prompting, but we could always pass a Good Samaritan-like law that would protect people who distribute free software. (The opposite would be an Attractive Nuisance-like law—that would be bad.)
There would be an industry of companies who provide liabilities for free software. If Red Hat, for example, sold free Linux, they would have to provide some liability protection. Yes, this would mean that they would charge more for Linux; that extra would go to the insurance premiums. That same sort of insurance protection would be available to companies who use other free software packages.
The insurance industry is key to making this work. Luckily, they’re good at protecting people against liabilities. There’s no reason to think they won’t be able to do it here.
I’ve written more about liabilities and the insurance industry here.