Other examples with high claim amounts, flood insurance, health care, etc.
It doesn't matter how high the minimum cost is, and you cant judge any kind of insurance based solely on that. The chance of it happening is just as important. Let's say 1% of all companies get sued for patent disputes every year (I don't know the stats on this, just an example), with an average defense costing $500 000. The insurance company also wants to make money, so let's have them charge 150% over cost.
$500k x 1.5 = $750k (amount of revenue per 100 customers)
$750k x 0.01= $7500 (cost per customer per year)
$7500 / 12 = $625 (cost per customer per month)
Now even that number isn't that high, and I assume 1% of companies getting hit with patent lawsuit per year is bigger than the real figures.
Average cost of a car claim (ignoring glass) is probably in the $5,000 range. The average person gets in <0.5 accidents a year, so coverage is <$2,500 for the average person.
Average cost of a patent claim is, say $200,000 (that is a minimum, but we will treat it as an average). Average company gets 0.05 patent claims per year (1 in 20). Coverage would be $1,000 a month. Not too bad.
Now lets add what happens after the first time you pay out an insurance claim within 6 months. Someone in your company gets $200,000 for a client list, your patent claims per year just became 10 per client. Good luck.
Insurance companies don't sweat big lawsuits and have all the resources to put up a fight and spread the risk.
It's only a matter of them viewing it as an opportunity. It will happen. And they will be able to effectively (at scale) jerk around the trolls till the cows come home.
The trolls will either settle for a nominal amount (think of it as a protection racket) or pick a different house to break into without an alarm.
They all want to help erase software patent abuse anyway, right? Are they serious about it?
If so, they could put together this insurance at reasonable/subsidized rates for startups, and immediately get the opportunity to fight 90%+ of all patent troll cases relevant to their interests.
But the companies I mentioned don't actively engage in shakedowns, as far as I know; I left Microsoft off of that list because of its poorly disguised attempts to destroy Linux through patent trolling, and Apple because of the Samsung case, and Oracle because of the Java case, and Amazon because of one-click ...
In contrast, I don't see something like this necessarily being against the best interests or modus operandi of the companies I mentioned.
I can see it being unpractical, unlikely or unattainable for a variety of reasons, but those companies have de-facto monopolies, not state-granted monopolies (patents), and that they seem to prefer to operate in a world where you're allowed to innovate.