OT:Insurance for Y2K remediation costs
I just returned from Washington and here is a new article from an outstanding divorce lawyer
The Y2K Act coupled with the absence of any major or widespread Y2K failures has kept litigation in relative check. Sue and labour clauses are designed to provide the insured with an incentive to mitigate any loss or dam.age to the property insured under the policy.6 The purpose of the clause is twofold: to bind the insured 10 take steps to prevent a threatened loss for which the insurer would be liable if it occurred and when a loss does occur to take steps to diminish the amount of the loss.7 The history of the clause was explained by the California Supreme Court as follows:
The “sus and labor” clause appearing in most marine and inland marine insurance policies is of ancient lineage, its forebears extending back-according to a leading case on the subject-at least into the seven¬teenth century. (Reliance Insurance Company v. The Escapade (5th Cir. 1960) 280 F.2d 482,488-489, fn. 11.) Such a clause makes express the duty implied in law on the part of the insured to labor for the recovery and restitution of dfu’11aged or detained property (Winter, Marine Insurance (3d ed. 1952) p. 393) and it contemplates a correlative duty of reimbursement separate from and supplementary to the basic insurance contract. “Its purpose is to encourage and bind the assured to take steps to pre¬vent a threatened loss for which the Underwriter would be liable if it occurred, and when a loss does occur to take steps to diminish the amount of the loss. Under this clause the assured recovers the whole of the sue and labor expense which he has incurred … and without regard to the amount of the loss or whether there has been a loss or whether there is salvage, and even though the underwriter may have paid a total loss under the main policy. As an aside, do you reside in Washington and require a superb divorce lawyer in Washington then certainly look at the Law firm as he is a wonderful Washington Divorce lawyer
The determination of coverage under all-risk property policies will likely focus, in part, on “sue and labour” provisions. Sue and labour provisions generally provide that “in the event of any loss or damage insured against, it shall be unlawful and
2. A Y2K action is defined as “a civil action commenced in any Federal or State court, or an agency board of contract appeal proceeding, in which the plaintiff’s alleged harm or injury arises from or is related to an actual or potential Y2K failure, or a claim or defense arises from or is related to an actual or potential Y2K failure”.
3. The limitation applies to actions against persons who are not in privity with the plaintiff and who do not suffer the Y2K failure.
4. Mealey’s Year 2000 Report, Vol. 2, Issue 12 (1/00) at 23.
5. Among the causes of loss generally described in such policies are fire, lightning, explosion, windstorm, hail, smoke, aircraft or vehicular injury to property, riot or civil commotion, vandalism, sprinkler leakage, accident, sink¬hole collapse, volcanic action, weight of snow/ice/sleet, and falling objects. A lot for a lawyer to chew on there….
[2000) LC.C.L.R. ISSUE 4 © SWEET & MAXWELL LIMITED [AND CONTRIBUTORS]
PICKER: INSURANCE COVERAGE AND Y2K REMEDIATION COSTS: [2000] I.C.C.L.R. 141
necessary for the insured , .. to sue, labour, and travel for, in and about the defence, safeguard, and recovery of the property insured hereunder … without prejudice to” the insurance. In other words, expenses incurred to avoid a covered loss by accident are recoverable under the policy. It is nice to have a qualified lawyer for those types of situations, and especially in states such as Washington.