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Technology Stocks : TAVA Technologies (TAVA-NASDAQ)
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To: Captain Jack who wrote (2395)9/7/1997 8:54:00 PM
From: Steve Childs   of 31646
 
The sequence of events on Y2K insurance liability issues will be interesting to follow. More insurance companies are leaning toward exclusionary provisions in their policies. It seems like insurers want to treat the problem as they do earthquake insurance in California: they arn't going to cover it unless they are forced to. This is good news for companies like Topro, because insurance will not be a solution to Y2K problems; only a fix will be. However, I wouldn't be surprised to see - as early as next year - class action lawsuits against insurers or even government regulation forcing them to cover the problem. Hopefully TPRO's solutions are both comprehensive and foolproof, because it would make sense that companies will force Y2K vendors, if they can, to accept liability for consequential damages arising from defects in their fixes. Especially if any factory downtime occurs after a fix is in place. I predict that year 2000 insurance-certification compliance audits will become a whole new revenue stream for TOPRO after 1998, because even once fixes are in place, insurers are going to need to certify them in order for it to fall under the regular policy coverage. If Topro wanted to get a little creative, they could create a new class of Y2K vendor, called insurance-certified Y2K, which means that their work would escape post-auditing (by being pre-certified by insurers) and thereby be a cheaper total solution for companies. In any case, Year 2000 = lawsuit city.
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