Cancellation insurance

I like to deliver the predictability you need in these troubled times —Peter Wildeford

I am up for offering some amount of insurance for being cancelled, i.e., losing one’s job as a result of inane culture war fights¹. I think that this could be in expectation a mutualy beneficial tradeoff in the case where my counterparty is very risk averse², and so is happy to pay for a healthy risk premium.

The main problem I see with this is that insurance creates an incentive to be more cancellation-seeking. I think this can be mitigated by reducing the payout amount such that getting cancelled is still pretty bad. I think that right now, I’m comfortable offering cancellation insurance to the tune of $10k on a handshake basis³ for a $100 annual payment implying a 1% probability or a ≤1% risk premium.

This means that I can as of now only offer a small number of such insurances—because I would like to be able to pay them all if all the clients are cancelled, as might happen, e.g., because of selection effects or flawed estimation on my part.

Such cancellation insurance would also require a tight definition of cancellation, or otherwise some trustworthy resolution mechanism. A majority vote of three persons mutually trusted would suffice on my part, but scaling would require other mechanisms, like, perhaps, kleros.

If you are interested in this, reach out and share your social media profiles so that I can try to assess your risk.

Or other such definition.↩
Or, from my perspective, irrational. The Venn diagram of people who are irrational enough to be very risk averse but rational enough to buy cancellation insurance is probably pretty narrow.↩
Meaning that I am not willing to escrow this amount, because I think I could get much more than 1% on e.g., prediction markets.↩