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1998-04-21 10:03:22


No Y2K Liability Insurance Coverage: Australia



Insurance companies will probably refuse to issue policies for y2k-related claims against physicians and hospitals. So says the head of the Australian stock exchange.

This is from the AUSTRALIAN FINANCIAL REVIEW (April 8).

* * * * * * * *

Australian health care professionals were warned yesterday that their professional indemnity insurance policies were likely to exclude year 2000-related claims, leaving them exposed to patients' claims if equipment fails to work properly because of the Millennium Bug.

The chairman of the Australian Stock Exchange, Mr Maurice Newman, speaking yesterday at the Australian Private Hospitals Conference on the Gold Coast, told delegates that they were in the "firing line" regarding Year 2000 computer issues.

Mr Newman said he believed that industry and Government at all levels would not finish their year 2000 projects in time, and cautioned of the potential "cascading" effects of embedded controller chips, which may feature date logic that could then affect the operation of other information systems. . . .

Mr Newman, who is chairman of the Government's Year 2000 Steering Committee, told delegates they would not be able to rely on insurance policies to protect them.

"Lloyds underwriters are already withdrawing cover from airlines and air safety regulatory authorities if their situation is unsatisfactory," he said.

Describing the Millennium Bug as a "highly contagious, all-pervasive disease which unless controlled will assume epidemic proportions", Mr Newman warned that there was a significant threat to public health, safety and critical infrastructure.

Ms Jeanette Reicha, information systems manager for Epworth Hospital, stressed to delegates the importance of including equipment containing embedded controllers in year 2000 remediation programs.

"Think about all the places that chips are used in a hospital, lab or clinic," she said. "For example, infusion pumps, laboratory equipment, MRIs, CT scanners, dialysis, chemotherapy equipment, intensive care and so on.

"How many medical devices do a date, age or timing calculation? Probably more than you know. How many of these are going to fail or give erroneous results? No-one is sure."

Ms Reicha said hospitals also needed to consider their supply chains.

"What if the Blood Bank doesn't take adequate measures to ensure uninterrupted reliable operation? Or your linen service, food suppliers, oxygen suppliers or ancillary services such as radiology and pathology? How long can a hospital function without critical goods and services, and at what point do shortages start to impact on the quality of care?

"Do you think it will be an adequate legal defence to claim that you were prepared but your suppliers weren't?"


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