The insurance industry, trial lawyers and business groups are squaring off over policy provisions tucked into the proposed state budget that would overhaul liability and auto insurance laws.

If passed with the budget, they would grow plaintiffs’ opportunities to seek damages against wrongdoers and raise the minimum amount of coverage that vehicle insurance consumers must purchase.

Republican critics in the Legislature and the state’s largest business group say the changes would harm the state’s business climate.

The state trial lawyers’ association counters that the changes would protect consumers. “We have to set aside our political views and the political rhetoric and just try to do what’s right,” said Kenosha County attorney Paul Gagliardi, president-elect of the Wisconsin Association for Justice.

One measure would overturn a 1995 law prohibiting the use of “joint and several” liability, except in cases where one defendant is found to be at least 51 percent at fault.

Before 1995, those found to be 1 percent at fault could be made to cover the entire damages for a case, if others involved were unable to pay. Gagliardi said change from that has led to a “huge expense” for the state, victims and consumers.

Gov. Jim Doyle’s original budget plan this year included lowering the joint and several threshold back to 1 percent, but business and insurance industry groups cried foul and a compromise from the Legislature’s Joint Finance Committee raised it to the current proposed 20 percent.

Still, the provision is opposed by Wisconsin Manufacturers and Commerce.

“The business community is united in urging the Legislature to reject the $3 billion in higher taxes and joint and several liability,” WMC President James Haney said in a Tuesday statement, trumpeting the collection of 2,100 petitions from business executives in opposition to the budget. “The budget under consideration will hamper job creation in our state and prolong the recession.”

Rep. Robin Vos, R-Caledonia, last week called the joint and several item “about as egregious of a provision as you could possibly find.”

The two sides are also divided over auto insurance provisions in the budget.

Though Wisconsin is one of just two states that does not require motorists to purchase insurance — the other is New Hampshire — the lowest level of coverage available to those who do buy it is $25,000 for injuries for each person in an accident and up to $50,000 in total coverage and $10,000 for property damage coverage.

Doyle’s budget proposed increasing the minimums to $100,000 per person, $300,000 total and $25,000 for property damage.

The Wisconsin Insurance Alliance opposed the change, believing it would hike premiums, particularly for those who can only afford the minimum coverage.

Andrew Franken, president of the alliance, said he suspects this will ultimately increase the number of uninsured motorists on the road.

“There’s not this overarching need to make this drastic change,” Franken said, dismissing a Joint Finance compromise that will phase in the increase over three years.

The alliance also opposes a plan to allow “stacking” of auto policies, where lawsuits could be filed against insurance policies registered to all of a defendant’s vehicles, not just the one involved in an accident.

Gagliardi said these provisions go after reducing clauses in policies that allowed insurance companies to avoid awarding full uninsured motorist insurance claims.

These matters have an effect on the state’s finances, Gagliardi said, as public entitlement programs often wind up footing bills for those who do not receive adequate insurance coverage.

“We’re stuck as citizens trying to balance a budget that we shouldn’t have to, because we’ve got these reducing clauses in these policies that no one even knows about, except these insurance companies that got them passed in 1995,” Gagliardi said.

The Assembly is expected to begin debating the budget on Thursday, with Senate review to follow next week. Once adopted by those bodies, the package faces possible vetoes from Doyle.