10-27-1999 Council Agenda - Laserfiche WebLink

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American Agency, Inc. 5851 Cedar Lake Road P.O. Box 16527 Minneapolis. MN 55416-0527 (612) 545 -1230 • Fax (612) 593 -8733 YEAR 2000 IMPORTANT NOTICE YOUR INSURANCE AND YEAR 2000 CLAIMS Daily the news is full of Year 2000 information, gauging the readiness of government and businesses. The time is drawing near and all should continue to focus on compliance within their business. Although no one is quite sure what will happen on January 1, 2000, it is likely the Year 2000 problem will affect every business and person in some manner. Any computer program, or any device that relies on a computer microchip to perform a function related to specific dares, could fail or produce incorrect data. Unfortunately, problems have already begun and more are being reported. Whether or not Year 2000 claims will be covered under these policies remains to be seen. Most argue the intent of their policy is not to cover these types of claims. Some insurance policies already have Year 2000 exclusions written into their policy language to reconfirm this position. The purpose behind insurance is to protect against losses caused by sudden and unforeseen occurrences. Generally, it is foreseeable that computers will fail within a business causing loss of data or business interruption. If the cause of loss is not from an outside source but is from within the business, the loss basically is not insurable since such losses are deemed foreseeable. Whether or not a given Loss will be covered is impossible to predict. Because of this and the purpose behind insurance (i.e., insuring unforeseen occurrences), we recommend that you not rely on your insurance to reimburse you for losses or problems associated with Year 2000 problems. Most carriers ne longer underwrite, separate Year 2000 insurance policies. When they did, these policies were very expensive and provided only limited coverage. [Of the insurance carriers still underwriting separate Year 2000 policies, the coverage remains very limited and costly]. There is no guaranteed way to immunize your company from Year 2000 problems, but there are several steps that you can rake to attempt to mitigate the impact of this problem. You need to be concerned with your business and your vendors' businesses. We value your loyalty as an American Agency customer and believe it is in your best interest to take steps aimed to mitigate possible Year 2000 claims. Also, if you are interested in obtaining separate Year 2000 insurance, please let us know and we will attemnt to provide you with estimated premiums and policy coverages. PAGE 227