We are continuing to fight. Most of the companies and organisations involved in Y2K litigation base their suits on the sue and labour clause. This has its origins in 17th Century maritime insurance policies and provides coverage for taking deliberate, emergency action that may result in a small loss but averts a larger one. For example, insurers would pay for cargo tossed overboard or emergency repairs to keep a ship from sinking. Companies assert that by upgrading their computer systems, they avoided what could have been catastrophic losses, and are thus entitled to reclaim some of the costs of upgrading.
Insurers contend that the sue and labour clause doesn t apply.
They say Y2K remediation costs should be considered regular business expenses and are not the result of imminent failure, as the coming of 2000 was well known. Usually when insurers are notified of a lawsuit, they reserve a percentage of what they estimate the claim may cost if they lose the case. Hartwig says insurers have not reserved for these cases, since the claims are outrageous and have almost no chance of succeeding. And he dismisses any hopes that insurers will settle out of court. If they were going to settle they would have done so long ago, he said.