It applies to me as well, but after entering my password my USB stick
works: it boots nicely with Lubuntu. Question is: is this (still) a bug?
It isn't very user friendly though to provide a pop up message referring
to system policies.

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https://bugs.launchpad.net/bugs/859539

Title:
  usb-creator-gtk fails to install bootloader: "System policy prevents
  installing the bootloader"

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