Strictly from an insurance business perspective, there are two major problems with this:
* Netsec events are black swans: it's very, very hard to model how often a security breach will occur. One could checklist all the ways by which we know currently sites are getting hacked, and would still have to pay out, _because hacking exploits things we don't already know_.
* When a hack occurs, it can happen at scale. Unlike eg life insurance, where you have a single payout for hard-to-predict events, the better the hack, the higher the potential for damage, and so the higher the total payout.
These two together means an IT-security-insurance company might do well for a few years, then file for bankruptcy at the first event that hits it, due to inability to pay.
* Netsec events are black swans: it's very, very hard to model how often a security breach will occur. One could checklist all the ways by which we know currently sites are getting hacked, and would still have to pay out, _because hacking exploits things we don't already know_.
* When a hack occurs, it can happen at scale. Unlike eg life insurance, where you have a single payout for hard-to-predict events, the better the hack, the higher the potential for damage, and so the higher the total payout.
These two together means an IT-security-insurance company might do well for a few years, then file for bankruptcy at the first event that hits it, due to inability to pay.