‘Tort Reform, Industry Reform’

Your editorial hit the mark squarely. I believe that there are many small businesses suffering extreme hardship due to uncontrolled increases of rates for liability insurance. They presently have nowhere to turn for appeal or help.

Although much better informed than a few months ago, the public generally is still not fully aware of the problem. Retail businesses often are forced to absorb much of the increased cost, or to drop liability coverage entirely.

As owner of an ice skating rink in Pasadena, I am paying an annual premium that is more than 1,000% (10 times) what we paid last year. And it is not fixed: it is calculated as 25% of our gross income. (We’ve had no claims in 10 years of operation.) That is the only coverage we could obtain after a four months’ search last fall.

We were perhaps lucky. As you noted, some businesses cannot find coverage at any price. But we cannot survive long with such a cost over which we have no control; we cannot increase our prices sufficiently to cover the attendant losses.

It’s an insane situation, peculiar to the United States. You have correctly identified both a segment of the legal profession and the insurance industry as the chief contributors to the problem. Neither should be allowed to continue their current practices without reform.

F.E.C. CULICK

Pasadena