But what if the only insurance policy you can afford is a pith helmet?

Say what you will about the small, nimble news organizations of the future — liability insurance is going to be a problem. I emailed 13 news startups from Atlanta to Seattle to see how they’re handling it; the answer, usually, was that they aren’t.

“We are more or less without a safety net,” wrote David Cohn, of the journalism microfinancing service Spot.us, one of several with similar answers. (He’s gotten lawyers to draw up language that attempts to pass all liability to writers who use Spot.us, but of course that’s no guarantee.)

Insurance companies, of course, would love to sell a safety net to Cohn and other entrepreneurs. But there’s a problem.

Here’s the chicken-and-egg dilemma that any new variety of business faces when it looks for insurance:

Your insurance isn’t cheap until lots of your peers start buying it. A custom insurance package typically sells for about $2,500 annually, enough to pay for the underwriting calculations as well as the actual risk. If an insurer charges much less, “by the time they do the calculation, they’re already losing money,” Bob Cox of the Media Bloggers Association said.

Your peers won’t start buying insurance until it’s cheap. As my survey showed, $2,500 is well beyond the range most news startups will spend.

As an industry expands, of course, things get easier: the insurer can calculate risk once and sell its policy many times. The policy — the pith helmet — goes into mass production. That’s exactly what happened for solo bloggers last year, after Cox’s association became the first to offer a group libel insurance rate for bloggers, through Axis Pro. (They simultaneously signed on to a new Online Law 101 course for bloggers from Poynter.)

Once that barrier was broken, other groups like the Authors Guild followed immediately. The Online News Association plans to follow suit this fall with a group rate aimed at ONA members: the base premium of $500 a year would bring $250,000 in annual coverage and a deductible between $5,000 and $10,000, according to Rick Fenstermacher, a Miami media insurance consultant working with ONA.

Problem solved, then? Guess again.

Catch One: Teams still aren’t covered. The Axis policies offered by the MBA, AG and (soon) ONA are available only to solo writers and one-person newsrooms. Newsrooms with several professionals, counterintuitively, are bigger risks than pajama-clad bloggers; bigger organizations are harder to control and their pockets tend to be deeper.

Catch Two: Serial provocateurs still pay a lot extra. If you’ve ever drawn a libel suit before — not a successful libel suit, mind you, but any suit that cost more than your policy’s deductible — Fenstermacher says you’d be automatically ineligible for the basic policy. Instead, your policy would have to be personally adjusted, at greater expense. (Though still not as high as a custom package: the highest premium Cox has heard of in his group program was $1,200 annually.) Several lawsuits, and you could be totally uninsurable — even if you never lose. I like to think of this as single-serving libel insurance.

Fenstermacher is noodling a solution to Catch One. If his new ONA policy turns out to be sustainable, he said — it’ll require at least 750 to 1,000 participants by 2011 — he hopes to put together what he calls “the next stage”: a similar program for small newsrooms.

“If it’s a small group, say under five, then we could keep a deductible in the $50,000 range,” Fenstermacher said. (The details are still vague. Later, he told me his target deductible for a small newsroom would be “something in the $25,000 range.”)

Yikes. Either option would be more than the direct legal budget of $20,000 used annually by the Voice of San Diego, which has an editorial staff of 11 and was the biggest, best-armored news outlet in my small survey. If deductibles are that high, many small outlets — bigger than blogs, smaller than all but the smallest papers — are likely to just keep working without a net. Without a pith helmet.

And if most small newsrooms do without insurance, it’ll never become as affordable as bloggers’ policies have become.

That’d be a shame. Not just because it would leave today’s brigade of entrepreneurs in danger. In a world of decentralized media authority, readers and sources will be hungry for any measure of a news outlet’s legitimacy. And what’s better proof of trustworthiness than the official backing of an insurance company? If quality journalists can’t use proof of insurance to set themselves apart from the hacks and hucksters, tomorrow’s news minefields are going to be that much harder to negotiate.

Our survey of startups

By the way, here are the results of my small, arbitrary survey of local news startups. Three outlets carried libel insurance:

The New Haven Independent has six full-time staff and a libel package with a $2,500 annual premium.

Jim Walls of Atlanta Unfiltered, a solo act: libel insurance was canceled this summer, but he used cash from an IRE investigative fellowship to buy a $250,000-per-claim, $2,500 deductible policy for $500 a year.

Voice of San Diego, with 11 editorial employees, has a libel insurance policy as well as a $20,000 annual budget for direct legal services.

Ten carried no libel insurance:

Gawker Media Group doesn’t carry libel insurance; COO Gaby Darbyshire, a lawyer, handles the company’s internal legal duties herself.

Citybizlist.com, with four editorial employees in Boston, Philadelphia, D.C., Atlanta and Baltimore, is “looking into” getting libel insurance.

Coastsider.com, a part-time husband-wife operation near San Francisco, has no insurance.

The Ann Arbor Chronicle, a full-time wife-husband operation, has a lawyer on retainer; at her advice, they’ve avoided buying libel insurance.

NewWest.net, with seven editorial employees, once had a libel insurance package but eliminated it to cut costs.

New Raleigh’s volunteer editorial staff members “have certainly gotten legal threats that make me want to get this kind of protection,” said publisher David Millsaps, but they haven’t yet.

Bikeportland.org, which has two editorial employees, doesn’t carry insurance; they’ve handled past legal expenses ad hoc.

Seattle political blog horsesass.org doesn’t carry insurance. Founder David Goldstein said his volunteer team has “always assumed (hoped?) that folks in our community would come to our legal aid should the need arise.”

Spot.us, which has two employees, doesn’t carry libel insurance.

Christopher Grotke of iBrattleboro.com, much of whose content comes from users, said neither he or his wife Lise carry “libel insurance for the things we contribute to the site, and I doubt anyone else does.”