I think you may be over reacting a bit. I don't think $500,000 per occurrence is out of line.  I carry $1,000,000 per occurrence.  The absurdity is not that a company would require those limits - the absurdity is that abstractors don't make enough to carry decent liability limits. 

If you don't do a lot of volume for them, and your other clients don't require those limits, it may make sense for you to politely decline the work.  Otherwise, you might just reply with a "revised" fee schedule and let them know that if you will be forced to take on the extra expense you will have to increase your fees. 

Unfortunately, they may be able to find others who are willing to carry more coverage and charge them less.  That is always a risk in this business.  But, you can't blame the client for that - there are too many abstractors willing to work for free these days... I don't understand that.

All you can do is price the E&O and evaluate your options.  Perhaps you could consider increasing your deductible.  We have a $5,000 dollar deductible because I figure that any claim under $5,000 would be cheaper to pay when you consider what will happen to your premiums if you file a claims.

Best,
Robert A. Franco
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