Step 1: Write an insurance contract against the malicious use of Ethereum

Step 2: Find someone foolish enough to accept the other side of the insurance contract, in a world where "insurance fraud" is no excuse

Step 3: Use Ethereum maliciously, stealing your own Ether under another identity

Step 4: Collect insurance

Step 5: Profit (in Ether)

Step 6: Good luck turning your Ether into actual money when people figure out how broken everything about it is

This is a smart response. The insurance company could also review the contract code in order to provide cover -- this would give investors extra confidence.

Suppose that I want to make a medical device, and I want to get liability insurance for when a bug in its code administers a lethal dose of radiation to a patient.

Is there any extant insurance company that would want to review my code in exchange for a lower premium?

If not, why would one be willing to do this for a flash-in-the-pan cryptocurrency, but not a useful, real-world device?

For an insurance policy like that, they wouldn't offer any policy without auditing the device, including the code.

Something like this: https://news.ycombinator.com/item?id=11789829

Sounds like kernel space code.