INSURANCE: A Question of Liability

A Question of Liability

Throughout the U.S., playgrounds, skating rinks and swimming pools closed, small businesses wobbled precariously and public schools risked major lawsuits whenever they opened their doors. Such were the problems that rocked states, municipalities and businesses beginning in 1984, when companies providing liability insurance sharply raised rates or simply canceled policies. Last week attorneys general from nine states charged in a series of federal lawsuits that the crisis was manufactured by major insurers through what Massachusetts Attorney General James Shannon called "back-room deals, secret communications and thinly veiled threats."

The state officials charge that executives at Allstate and Hartford Fire acted in...

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