Insurance isn't a scam when someone tries to sue you but it is when you have to pay the premiums to prevent the former financial risk.
The real greedy bastards are those who see insurance fraud as a low-risk and potentially lucrative enterprise and without them who would need public liability insurance in the first place.
Here is an interesting document regarding such "compensation culture" in the UK (I suspect it is similar in the US).
State of Fear: Britain's "compensation culture" Reviewed
http://shura.shu.ac.uk/691/1/fulltext.pdf
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