You may or may not have heard about the Millennium Bug. It isn't just another garden pest: this one is expected to cause havoc with computers, big ones, small ones, corporate ones, personal ones. Up to just a few years ago, computer date/time chips were set to recognise dates by just two digits, as in, 97 for 1997.
Apparently for cost reasons, computer designers did not bother programming in the change of century, and as a result, when the year 2000 happens, computers that fall into this category (ie. most built prior to 1995) will recognise the year as 00 and assume the new millennium date is 1900.
Industries worldwide are spending millions to beat the millennium deadline and convert their computers, but time is running out.
Even if a company does switch its computer date chips, problems may still occur if supplier companies or other firms it deals with have not completed their conversion in time.
The Irish Insurance Federation is the latest organisation to comment about the dangers of the Millennium Bug and has warned that most existing insurance policies do not cover the year 2000 risk.
Potential problems include: computer-controlled production systems failing and causing damage; cut-outs failing to operate leading to overheating, fire or explosion; rapid and uncontrolled shutdown of processes leading to damage to machinery, feedstock, etc; safety guards on machines malfunctioning; destruction of stock because the computer believes it has passed the expiry date; cancellation of orders of new stock; inability to issue invoices or track debtors and creditors; incorrect processing of payments; disruption of supply chains due to failure of other company's computers; failure of intruder and fire alarms, sprinkler systems; failure of implanted computer chip equipment, such as air conditioning and heating, lifts, telephone exchanges, photocopiers, fax machines, VCRs, fridge units, ovens, some automobile systems.
"Many insurers may decide to introduce exclusion clauses under commercial property, liability and other policies to specifically exclude damage, consequential loss and legal liabilities arising directly or indirectly from policyholders' failure to become Year 2000 compliant," adds the IIF.
Individual policyholders may find that exclusion clauses will be introduced under their household and motor policies "but these are likely to be limited exclusions as most insurers intend to grant cover for fire and other subsequent damage following failure of an embedded chip in a household appliance or motor car. Only the damage to the individual appliance or unit would not be covered."
