MARYLAND GOV. Harry Hughes, having heard the plaintive cries of municipalities and day-care centers around the state, has come up with a short-term approach to make it easier for them to find affordable liability insurance coverage.

Insurance companies have been reeling under the weight of huge jury awards in liability cases. As a result, they have raised the premiums they charge to municipalities and child-care facilities by as much as 840 percent -- if they haven't dropped out of the risky business of liability or medical malpractice insurance altogether.

The jury awards and settlements are easily reaching the million-dollar range in cases that might have been scoffed at years ago. As a result, some Maryland towns and cities and some professional workers cannot find an insurance company willing to sell them a policy or to offer one that is affordable. In one case, the entire town council of Sykesville, Md., resigned because it could not renew its liability insurance coverage.

Gov. Hughes' interim approach, called the Maryland Market Assistance Program, is supposed to help in such situations until a long-term solution is reached. Several insurance companies have been invited to participate in the plan. A town, for example, that needs insurance and has not found something suitable could ask if any of the companies would offer a better deal. If not, the risks of insuring it would be assessed to see if changes could be made to reduce them. As a last resort, the state would ask insurers to provide coverage on a voluntary basis. In the meantime, a task force will be developing a long-range solution for the state legislature to consider when it opens for business in January.

Other states have already taken action. A California medical malpractice law, forexample, limits awards for pain and suffering to $250,000, shortens the statute of limitations in such cases, encourages arbitration between parties and calls for periodic instead of lump-sum payments to successful plaintiffs. The Supreme Court this term declined to hear two cases challenging its constitutionality.

Twenty-seven other states have put caps on the amounts that juries can award in such cases. The Maryland Municipal League, representing 155 local governments, wants the state to do the same thing. Some of the same states have placed a 20 to 25 percent lid on the percentages of the awards that lawyers get to keep. Lawyers customarily get one-third or more of the awards or settlements.

Gov. Hughes' short-term solution is laudable, but the more substantive goal is a law that reins in jury awards and lawyers' fees. It should encourage arbitration instead of immediate lawsuits, and it should discourage frivolous lawsuits. Those are the essential ingredients that are needed to solve the insurance crisis.