Bug Byte

The world might not stop on January 1, 2000, but many computers will. If you're looking for insurance against Y2K-related problems, forget it: Insurers and suppliers alike are backing away from assuming responsibility for any business losses.

"I'm not aware of any product designed to protect small businesses," says Nancy James, principal of N.P. James Insurance Agency in Concord, Massachusetts, and a cyberspace liability specialist. "Every insurance company in the world is telling people why they're not [going to be] insured."

Insurance companies argue that, while their policies are meant to cover unexpected events, there's nothing unexpected about the millennium's approach. "We know exactly when it's coming," says James. "You've every opportunity to fix the problem [now]."

An even bigger reason not to expect a bailout? There's simply not enough money to cover expected damages. Some analysts predict that businesses will lose roughly $600 billion from millennium-related business interruption. The reserve for all United States insurance claims--including home, auto and every other policy type--is only $280 billion.

All the more reason to fix your system before it's too late.

Claire Tristram is a business and technology writer in San Jose, California.

This article was originally published in the February 1999 print edition of Entrepreneur with the headline: Bug Byte.