The Second Assumption
It may not be efficient to allocate the loss to ChoicePoint if the second assumption is not true. That assumption is that is no way for those individuals to protect themselves from such crimes. If there is, the expected benefit of each individual protecting himself or herself might be greater than the expected benefit from ChoicePoint’s investment in the system.
In considering efficient allocations of liability for losses among parties, one must consider the relevant actions open to all the parties. Among the options to consider is insurance. Sometimes it is less expensive to compensate for a harm after it occurs than to try to prevent it.