Nation: Sorry, Your Policy Is Canceled

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Among professionals, malpractice insurance problems have plagued lawyers, engineers, members of corporate boards and even clergymen. A growing number of clerics are buying, or having their churches buy, policies to protect them against suits like the one brought by a California couple who attributed the suicide of their 24-year-old son largely to inept counseling by his pastors. (That particular suit, filed in 1980, was dismissed for a second time last year; the case is still being appealed.) Suits against doctors, particularly specialists such as obstetricians and neurosurgeons, have been more successful and have led to some of the highest insurance premiums. A typical annual premium for an obstetrician in Los Angeles is about $45,000, and for a neurosurgeon in Long Island, N.Y., about $83,000.

Product-liability insurance presents a major problem for the makers of everything from toys to antitoxins. Pertussis vaccine for children ran short a year ago because Connaught Laboratories suspended production for a nine-month period during which it could not find insurance at an acceptable price. Now Lederle Laboratories, the only other maker of the vaccine, is talking of halting output in July if a threatened cutoff of its liability insurance materializes. Beech Aircraft figures the cost of liability premiums at a stunning $80,000 on each plane it sells. Says William Mellon, director of corporate communications: "The owner-pilot market has all but dried up, and one cause is the cost of product liability. It has driven the price of a new airplane out of the reach of the average person who wants to buy one." Some commercial fishing boats that once sailed out of Pacific Northwestern ports have been put into dry dock because owners could not afford liability-insurance premiums that commonly have doubled in the past year or so.

Rising premiums are forcing up prices on a variety of services too. Ski-lift tickets are jumping by $2 or $3 at many resorts. Through last year Kennestone Hospital in Marietta, Ga., insured itself for the first $1 million of any claims that might be made and paid a premium of $70,000 for additional coverage up to a maximum of $10 million. Now the premium has quintupled to $350,000, and on top of that the hospital has had to come up with another $1 million for its self-insurance trust fund, because the deductible was raised to $2 million. Says Executive Director Bernard Brown: "If you come to our hospital, you pay the price. It is being passed through."