BBC, Tuesday, July 21, 1998 Published at 18:18 GMT 19:18 UK

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Home computers may not be covered if they break down in 2000

Insurers have warned they will not meet claims for home computers or other electrical equipment which break down at the start of the year 2000 because of the Millennium Bug.

The government taskforce set up to deal with the computer problem is seeking an urgent meeting with insurers to discuss the problem.

The Action 2000 committee is unclear how insurance companies were preparing to deal with the bug, which could lead to computers and other electrical equipment not recognising the year 2000.

Machines could fail if they do not recognise 2000Action 2000 Chairman Don Cruickshank said the government might have to intervene if there was a continuing unwillingness to provide cover.

A number of insurers, faced with reinsurance difficulties, have already said they plan to include Millennium bug exclusion clauses within policies.

Mr Cruickshank said such a move was unacceptable and could jeopardise both private and public sector operations.

Mr Cruickshank said: "We are not in deep enough discussions yet with the insurance industry, which we have heard want to remove all cover from their Millennium policies.

"We know that brokers are not happy with this position. The government may have to intervene if they do not offer reasonable terms in terms of health and safety.

"I don't know what the answer is as we have not done sufficient depth of analysis."

Action 2000 was set up last year to help tackle the problems caused by the inability of many computers to recognise the date change from 1999 to 2000.

The government may intervene to make sure insurance is maintainedAction 2000 director Gwynneth Flower said insurers had a right to demand careful planning but should be prepared to underwrite risks where reasonable care had been taken.

She said: "The insurance industry should pressurise industry to take a responsible position but when industry has taken a responsible line, we believe insurance cover should be maintained."

Action 2000's second survey of 1,200 small and medium-sized businesses showed three in four claimed they were already fully prepared to handle the threat posed by the bug.

But detailed questioning concluded that in fact only one in four businesses have taken realistic measures to tackle the problem.

Mr Cruickshank said the biggest companies, by contrast, were generally well prepared