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To: Lizzie Tudor who wrote (5134)	9/24/1998 9:57:00 AM
From: Les H	Respond to of 67261

Y2K suits could drown consultants By Mark Mehler, Sm@rt Reseller ZDNET Insurance policies may not protect technology providers from irate customers. One of the few protections for integrators and consultants taking on year 2000-related projects is the standard "errors and omissions" policy, which is the equivalent of medical malpractice insurance for today's technology providers. But it's not so standard anymore. UNFORTUNATELY, THIS PROTECTIVE layer is eroding fast, as insurers review their coverages and look to cap their liability exposure as the Jan. 1, 2000, deadline approaches. Many, if not all, insurance companies have already disclaimed, or are planning to disclaim, E&O coverage for Y2K mishaps in their new and renewal policies. Worse than that, says Sharon Marsh Roberts, chairman of the Independent Computer Consultants Association (ICCA), some small shops have already received notification from their insurance providers that their current E&O policies no longer insulate them from year 2000 claims. "Insurers are looking at a situation where the levels of responsibility are so complex that their standard due diligence is not enough," Roberts says. "Even reasonable consultants can't protect themselves from lawsuits, and insurance companies can't afford that risk." Mims International, a Maryland-based insurer that sells discounted E&O coverage to members of the ICCA, is among those taking a proactive position. A spokeswoman for Mims says that all new or renewed policies issued after Jan. 1, 1999, will exclude coverage for Y2K problems. Policies in force before Jan. 1, 1999, will cover those Y2K claims made before expiration. But here's the rub: There's no clear legal definition of what constitutes a valid Y2K claim. Mims and its competitors can avoid paying off on their current policies by saying that any Y2K claim made between now and the time the policy is renewed is "correctable" before the year 2000. "It's a sensitive issue," says Roberts. "If the error is made now, but nobody really will suffer until Jan. 1, 2000, when is the claim for Y2K damages effective?" Fred Wilf, an attorney with the firm of Saul, Ewing, Remick & Saul of Berwyn, Pa., says the legal issue of "fortuity" also may come into play. "Insurance policies typically cover lightning strikes and other fortuitous events, some of which can even be anticipated," he says. "But with Y2K, you can foresee precisely when the disaster will occur. Insurance companies may use that to get around their liability." And that means consultants who specialize in Y2K issues could be left out in the rai