HomeMy WebLinkAboutCOM 0070.002 1998-2000 ~~~x~,
BISHOP INSURANCE AGENCY OF HAWAII, INC.
680 Iwilei Road, Suite 760
Honolulu, HI 96817
Phone: 808-536-7351 Fax: 808-531-0277
December 14, 1998
Joseph C Tyler Jr
Thelma W Tyler
Box 129
Kailua-Kona, HI 96745
Deaz Insured:
The new millennium is rapidly approaching and the changeover to "Year 2000" can affect
entire operations, including your computer systems and office facilities.
As many of you know, thousands, perhaps millions, of computers and devices with
embedded microchips record only the last two digits of a year. As a result, they may not be able
to recognize that January 1, 2000 (or subsequent dates) comes after December 31, 1999. As soon
as dates in the Yeaz 2000 become relevant to the operation of products or business transactions -
a process that has already begun -computers and microchips containing the "millennium bug"
may produce erroneous calculations or cease to function, causing problems that can range from
the merely inconvenient to the potentially disastrous. Inventory and accounting systems will be
affected; so will credit-card validation, electronic data interchange, automated banking reports,
pension benefit payments, drug distribution systems for pharmacies and hospitals, and
mechanical systems operating everything from office building environmental controls and
elevator banks to telephone switches and oil refineries.
Unfortunately, many insurance policies may exclude coverage for Year 2000 related
problems, as such losses are preventable by maintaining systems in normal working condition.
And business interruption policies cover only physical damage caused by unexpeeied events,
such as fires and storms, and may not extend to losses arising out of Year 2000 problems. Given
the potential uninsured nature of Year 2000 problems, you should take corrective steps
immediately to identify and minimize loss.
The following are some of the possible strategies that you may want to implement
(This is not an all inclusive listing ofstrategies):
1) Assess your operations and develop a yeaz-2000 conversion plan.
2) Review your office facilities and office product suppliers.
3) Educate your customers on the impacts of year 2000, especially if they are
small or in-home business owners.
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4) Consider securing an audit by a vendor specializing in Year 2000 issues to
show you where your business may be vulnerable.
5) Repair or replace systems most critical to your company's operations.
6) Upgrade software used on mainframes, PCs and laptops.
7) Test key systems for Year 2000 compliance.
8) Develop contingency plans to deal with "crashed" systems within your
company which may not be insured.
While we hope that you have taken care of or at least have taken steps to resolve any year
2000 issues, we would like to let you know that there is Year 2000 (Y2K) insurance coverage
available via a separate Y2K policy. It is designed to protect companies should their Y2K
conversion solution fail or result in disrupted business operations and third party liability.
Y2K Insurance may possibly provide the following coverages:
• Direct Business Interruption
• Contingent Business Interruption
• Third Party Liability Coverage
• Third Party Liability Coverage, including D&O and E&O, as well as
coverage for vicarious liability.
• Policy limits up to $100 million where limits are specific to the company's
Y2K needs.
• Coverage is excess of any other valid and collectible insurance or a
minimum $1 million per claim where no underlying insurance is in place.
Early indications of premiums are approximately 10%-85% of purchased limits. Select
carriers may refund a portion of premiums paid less losses paid under certain programs. Certain
carriers have limited the enrollment period to March 31, 1999 to cbtair. Y2K Insurance.
Should you need more information, please contact your agent.
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