This defense may lead to the ultimate irony. Questions of coverage for losses arising from our society's fascination with high-speed technology could be resolved by courts deciding whether imminent losses can take years to develop. Finally, insurers argue that economic damages in general and damage to computers and software in particular are not property damage within the policies. Again, this argument is well grounded in historical fact. However, first party property polices tend to be manuscript policies.
Some policies have specific provisions that include computer systems and electronic data.
For their part, policyholders have raised the ante in the pre-litigation war of words by suggesting that an insurer's liability for remediation costs under a sue and labor clause is supplemental to the policy limits. If the courts ever adopt that position, insurers could face exposure for the spectacular sums American businesses spent in becoming Y2K compliant. The pending lawsuits over the availability of insurance coverage for Y2K related costs involve both remediation costs and the liabilities faced by policyholders in claims brought against them by customers or other third parties. The percentage of the former is greater than that of the latter, albeit in small absolute numbers. In the pending coverage litigation, first party property policies are at issue for remediation costs.