Insurers get tough on 2000 bug

29th October 1999 at 01:00
COLLEGES could be left footing the bill for millennium mishaps after insurance companies said this week they would not pay out for breakdowns caused by the Y2K bug.

Colleges could be among the businesses worst affected, with large premises relying on security systems, telephone exchanges, lifts, air conditioning and heating systems which are all especially vulnerable to problems.

The Association of British Insurers have issued a leaflet explaining why problems might occur and precautions which should be taken. But although they are refusing to pay for breakdowns, they will cover any consequent damage. For instance, if a boiler or heating system breaks down, causing pipes to freeze or burst, the damage will be covered. The St Paul, the largest liability insurer in the sector with nearly 200 college clients, has confirmed that it will not cover millennium breakdowns.

The Millennium bug could see widespread failures of computer chip-controlled systems which depend on date-related information to work properly. It originates among older computer programs which processed dates using just two digits to save memory space so that 1999 is represented by 99. When the year 2000 arrives, some programs could read the new date as 1900, throwing computer systems into potentially dangerous and certainly expensive confusion.

The ABI booklet explains: 'What you won't be able to do is make an insurance claim for the cost of replacing any item which fails at the Millennium.

'The approach of the year 2000 is not insurable. Insurance is designed to cover the unforseen and unpredictable. But the Millennium is an entirely predictable event, even if some of the consequences are not.'

The Assocation of Colleges, which sent out a bulletin 12 months ago warning of health and safety implications of the Millennium and recommending precautions to take, say that most colleges are well prepared.

But Fred Sherwood, the AOC's health and safety director, warned against complacency, saying that the real issue for colleges should not be the loss of data from personal computers and management information systems but the safety of their staff. "In colleges there are many computer-controlled systems which have the potential, if they are not millennium compliant, to fail."

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