There are two reasons why PuTTY is not analogous to a physical lock in this context. One is that software products don't exhibit random variation: if PuTTY has a security hole (which does happen, although we do our utmost to prevent it and to respond quickly when it does), every copy of PuTTY will have the same hole, so it's likely to affect all the users at the same time. So even if our users were all paying us to use PuTTY, we wouldn't be able to simultaneously pay every affected user compensation in excess of the amount they had paid us in the first place. It just wouldn't work. The second, much more important, reason is that PuTTY users don't pay us. The PuTTY team does not have an income; it's a volunteer effort composed of people spending their spare time to try to write useful software. We aren't even a company or any kind of legally recognised organisation. We're just a bunch of people who happen to do some stuff in our spare time.
Therefore, to ask us to assume financial liability is to ask us to assume a risk of having to pay it out of our own personal pockets: out of the same budget from which we buy food and clothes and pay our rent. That's more than we're willing to give. We're already giving a lot of our spare time to developing software for free; if we had to pay our own money to do it as well, we'd start to wonder why we were bothering.
Free software fundamentally does not work on the basis of financial guarantees. Your guarantee of the software functioning correctly is simply that you have the source code and can check it before you use it. If you want to be sure there aren't any security holes, do a security audit of the PuTTY code, or hire a security engineer if you don't have the necessary skills yourself: instead of trying to ensure you can get compensation in the event of a disaster, try to ensure there isn't a disaster in the first place.
If you really want financial security, see if you can find a security engineer who will take financial responsibility for the correctness of their review. (This might be less likely to suffer from the everything-failing-at-once problem mentioned above, because such an engineer would probably be reviewing a lot of different products which would tend to fail independently.) Failing that, see if you can persuade an insurance company to insure you against security incidents, and if the insurer demands it as a condition then get our code reviewed by a security engineer they're happy with.
A.9.10 Can you sign this form granting us permission to use/distribute PuTTY? If your form contains any clause along the lines of ‘the undersigned represents and warrants’, we're not going to sign it. This is particularly true if it asks us to warrant that PuTTY is secure; see question A.9.9
for more discussion of this. But it doesn't really matter what we're supposed to be warranting: even if it's something we already believe is true, such as that we don't infringe any third-party copyright, we will not sign a document accepting any legal or financial liability. This is simply because the PuTTY development project has no income out of which to satisfy that liability, or pay legal costs, should it become necessary. We cannot afford to be sued. We are assuring you that we have done our best; if that isn't good enough for you, tough. The existing PuTTY licence document already gives you permission to use or distribute PuTTY in pretty much any way which does not involve pretending you wrote it or suing us if it goes wrong. We think that really ought to be enough for anybody.
See also question A.9.12
for another reason why we don't want to do this sort of thing. A.9.11 Can you write us a formal notice of permission to use PuTTY? We could, in principle, but it isn't clear what use it would be. If you think there's a serious chance of one of the PuTTY copyright holders suing you (which we don't!), you would presumably want a signed notice from all of them; and we couldn't provide that even if we wanted to, because many of the copyright holders are people who contributed some code in the past and with whom we subsequently lost contact. Therefore the best we would be able to do even in theory would be to have the core development team sign the document, which wouldn't guarantee you that some other copyright holder might not sue.
See also question A.9.12
for another reason why we don't want to do this sort of thing. A.9.12 Can you sign anything for us? Not unless there's an incredibly good reason.
We are generally unwilling to set a precedent that involves us having to enter into individual agreements with PuTTY users. We estimate that we have literally millions of users, and we absolutely would not have time to go round signing specific agreements with every one of them. So if you want us to sign something specific for you, you might usefully stop to consider whether there's anything special that distinguishes you from 999,999 other users, and therefore any reason we should be willing to sign something for you without it setting such a precedent.