The skyrocketing cost of liability insurance is having serious consequences for businesses. High legal and insurance costs have led two drug companies to curtail production of vaccines that protect children from whooping cough. And many small companies can't get adequate liability insurance for their officers and directors.

Of course, these businesses aren't the only ones bearing the costs of a litigious society. It may not really be bad luck to walk under ladders, but it certainly must seem so to the companies that produce them. When people hurt themselves with a ladder, they tend to blame the company that made it. Amazingly, ladder manufacturers pay more than 8% of sales for product-liability insurance, according to the Insurance Services Office Inc. (ISO), which develops standarized forms and recommends rates for the industry.

"We've been sued on probably six or seven occasions in the past 10 years for ladders we didn't even make.That's outrageous," says W. A. Flint Jr., president of A.W. Flint Co., a 105-year-old family business in New Haven.

Here are the highest advisory rates for product-liability insurance that pays claims of up to $25,000 for combined bodily injury and property damage -- the type bought by small businesses that are likely to incur limited liability. These are the ISO's base rates and don't include discounts for deductibles, which can cut the rate in half in some cases.

Insurance cost

Rank Product as % of sales

1. Wooden ladders 8.7

2. Other ladders 8.0

3. Wheels, including car & truck wheels 2.7

4. Drugs, medicine, & pharmaceuticals 2.5

5. Exercise & playground equipment 1.5

6. Sporting goods/athletic equipment 1.5

7. Household-type power tools 1.3

8. Machinery & machine parts 1.3

9. Drugs, medicine, & pharmaceuticals 1.1

for animals

10. Elevators 1.1

Source: Insurance Services Office Inc.