The strength of the old Bill around the Alliance is somewhat variable. Do something out of order in Alioth for example, and you'll be nicked before you can say "pigsty". However, out in Indaol, if you're an honest trader you better watch out because the police are hard pushed to protect the space around the starports, let alone deeper space...so you need a gun of some sort on your vessel.

Green: So tightly policed that you can safely enter the system with no defensive weaponry whatsoever. Offenders are quickly caught, no matter how minor the offence.
Cyan: Better than average policing. You need reasonable weaponry to be assured of a safe journey, but you don't need to be a particularly good combateer to survive here.
Yellow: Average policing. The system will be quite rough, and you should expect a few pirate attacks. Close to a starport, police protection will be strong. Reasonable weaponry and an "Average" Elite rating are a good idea before entering.
Red: Minimal policing - you're likely to find pirate attacks quite close to the starport. "Competent" Elite rating or better and a 4MW beam laser is recommended prior to entry.