Slowing the Insurance Liability Crisis

Slowing the insurance liability crisis

ROUNDUP

CAMRON E. BUSSARD

IT’S ALMOST IMPOSSIBLE TO MAKE IT through the day without hearing about another incredible liability lawsuit. This should not be news to anyone in the motorcycle business, however, where for years, product-liability problems have been hanging around the neck of the industry like some sort of legal albatross. After all, since even the weatherman is getting sued these days if he misses on tomorrow’s forecast, there’s no reason to believe that motorcycling would be immune from courtroom activities. But the situation has gotten so out of hand recently that no one, from the motorcycle manufacturers them-selves down even to the companies making riding apparel, is safe from the absurdly high cost of liability insurance, nor from the cost of mounting a strong defense—which, win or lose, can be almost as expensive as the settlement itself.

So make no mistake: Liability suits and the sky-high insurance premiums they bring about are among

the most pressing problems facing motorcycling today. Not only do large settlements have the potential to cripple the motorcycle industry, but so do the insurance companies’ fears of huge settlements. As a result, insurance companies are raising their liability premiums for manufacturers while at the same time lowering the amount of coverage provided by their policies. The insurance people claim that such measures are necessary for them to cover the net losses they suffered last year—the first time such a thing has happened since the 1906 San Francisco earthquake. This means that manufacturers in the motorcycle business will either have to pay more to the insurance companies while getting less in return, or somehow find large enough cash reserves to become self-insured.

What frustrates nearly everyone involved is that there is no simple solution to the problem. On the other hand, we are not totally helpless in the matter. There are measures everyone can take that, little by little, can help change a system that eventually could litigate motorcycling out of existence. Most of these measures call for us to write to our Senators and Representatives on the state and national level. There also are several people in Washington with whom we can communicate.

First, Assistant Attorney General Richard K. Willard heads a Reaganadministration task force on the liability crisis. This task force has already made recommendations to the President that, among other things, would put a limit on the size of settlements in injury lawsuits, and cut attorneys’ fees by 50 percent.

You can also write Senator John C. Danforth, chairman of the Senate Committee on Commerce, Science and Transportation, who is working for uniform liability standards and alternative claim systems that would allow a plaintiff means of restitution without going to trial. Other members of his committee, led by Senator Christopher Dodd of Connecticut and Senator Slade Gorton of Washington, are considering a nofault claim scheme as a basis for a workable legislative solution. When writing these people, be as succinct as possible. Let them know that you support them on measures that will help get the liability mess under control. Some suggestions you might make to them are the institution of a limit on the contingency fee system that encourages lawyers

to seek the highest possible damages rather than what is fair. Also, encourage legislation that would fine attorneys who bring obviously frivolous lawsuits before the courts in the attempt to coerce wealthy defendants into out-of-court settlements. Most of these types of measures, if instituted, would have only an indirect effect on motorcycling, as none address motorcycles specifically; but a problem of this mag-

nitude demands more than just a special-interest approach. After all, if just some of these broad measures were enacted, they could slow the flood of litigation enough to allow lower insurance premiums. And lower premiums for a manufacturer of motorcycling-related products could only have a direct and positive impact on the sport. They might make the difference between the continued existence of our favorite activity, and its slow, painful death.

Overseas touring

How many times have you thought about touring in a foreign land only to realize that it’s too expensive to ship your motorcycle there and back? Well, in Europe, at least, there are plenty of specialized travel services that will rent you a bike over there and even set up an itinerary for you. But if you’re interested in a

really exotic motorcycle setting and your thoughts turn to the Far East, you now can consider an excursion to a place where not many Americans have traveled on two wheels: China. The China Motorcycle Travel Corporation can make all the arrangements, including providing you with a bike to use on its tours in the south China region. The fees

include all meals and accommodations, and you get the use of a mid-sized motorcycle for the exploration of areas that have been closed to foreigners for decades. You can get more information by 4 contacting China Worldwide Travel Inc., 850 Burrard Street, Suite 1006, Vancouver, British Columbia, B6Z 2Jl Canada.

Death of the 55?

Some state finally did it. Nebraska’s state Legislature passed a bill to raise the speed limit on its interstate highways to 70 mph beginning in 1987. The rationale for this bill was that few people comply with the national speed limit, and that 55 mph makes

no sense on roads designed for much higher speeds, especially in western states where the distances between towns are so great. At this time, Nebraska governor Bob Kerry has not yet decided whether or not to sign the bill into law. He is under pressure from opponents of the bill who want to

ensure that Nebraska will not lose its federal highway funds by failing to comply with federal regulations. Some other states are beginning to take action to change their speed limits, but most of them remain cautious, waiting for someone else to do so first. That first move just might be right around the corner.