The year 2000 brings with it the potential breakdown of computer information systems due to a programmed inability to recognize a reference to a four-digit year. The possible scenarios for loss and liability include breakdowns in the banking and financial-services industry, manufacturing lines, and transportation systems.
Individual companies could face losses and liabilities arising from: 1) third-party suits due to Y2K-induced property damage or bodily injuries resulting in damages to a third party; 2) losses due to physical injury to a company’s own property, either to computer information systems themselves or to manufacturing process systems that rely upon those computerized systems; 3) business interruption due to physical loss or damage to insured property; and 4) the failure of directors and officers to take appropriate action to address potential Y2K losses before they are incurred.