Professional indemnity insurance: Year 2000 compliance issues

Professional Indemnity Insurance 01/05/1998

The Professional Indemnity Insurance Committee has been advised by one of the qualified insurers providing professional indemnity insurance cover to the profession that the commercial insurance market is currently discussing issuing a questionnaire and exclusion clauses similar to the one reproduced below to solicitors when their premiums become due for renewal, at the end of the current year. In view of this eventuality, the committee considered it prudent to bring the matter to the profession's attention, in order that members may make the appropriate preparations.

Please contact your insurers directly in relation to any queries you may have in relation to this matter, as the various insurers providing professional indemnity insurance may differ in their requirements.

Year 2000 exclusion

The insurers will not defend, indemnify or pay under this insurance in respect of any claim, loss, liability, or costs and expenses directly or indirectly caused by or contributed to or arising from or in connection with:

  1. Any computer system, whether or not the property of the insured, not being Year 2000 compliant
  2. Any correction or any attempted correction, conversion, renovation, rewriting or replacement of any computer system related to Year 2000 compliance.

The following definitions are added to this insurance:

'Year 2000 compliant/compliance'

shall mean that neither performance nor functionality of the computer system is affected by dates prior to, during and/or after the Year 2000. In particular:

  • Rule 1: No value or current date will cause or give rise to any interruption in operation of the computer system
  • Rule 2: Date-based functionality and performance of the computer system must behave consistently for [date] prior to, during and/or after the Year 2000.
  • Rule 3: In all interfaces and data storage of the computer system, the century in any date must be specified either explicitly or by unambiguous algorithms or inferencing rules
  • Rule 4: The Year 2000 must be recognised as a leap year by the computer system.

'Computer system' shall mean any computer, data-processing equipment media or part thereof, or system of date storage and retrieval, or communications system, network, protocol or part thereof, or storage device, microchip, integrated circuit, real-time clock system or similar device or any computer software (including not limited to application software, operating systems, run-time environments or compilers), firmware or microcode used, owned, operated or relied upon by the insured.

All other terms, conditions and limitations of this insurance, remain unaltered.