Although, the costs of insurance would need to be priced according to the ex ante costs, not the ex post costs.
For example: Bob embarks on a project with a 50% chance of success. If it succeeds, it saves one person’s life, and Bob sells the IC. If it fails, it kills two people.
Clearly, the insurance needs to be priced to take into account a 50% chance of two deaths. So we would have to require Bob to buy the insurance when he initially embarks on the project (which is a tough ask, given that few currently anticipate selling their impact). Or else we would need to rely on a (centralised) retrospective evaluation of ex ante harm, for every project (which seems laborious).
Although, the costs of insurance would need to be priced according to the ex ante costs, not the ex post costs.
For example: Bob embarks on a project with a 50% chance of success. If it succeeds, it saves one person’s life, and Bob sells the IC. If it fails, it kills two people.
Clearly, the insurance needs to be priced to take into account a 50% chance of two deaths. So we would have to require Bob to buy the insurance when he initially embarks on the project (which is a tough ask, given that few currently anticipate selling their impact). Or else we would need to rely on a (centralised) retrospective evaluation of ex ante harm, for every project (which seems laborious).