Y2K and Insurance: What's Your Liability for Failed Service?

It’s Saturday, Jan. 1, 2000, and a trucker heads out to pick up an important load from a medical supplies manufacturer. His company is under contract to deliver the just-in-time cargo within a certain time limit, and since its systems are Year 2000 compliant, he has no reason to think he won’t be able to deliver the load on time.

But what if the manufacturer has fallen victim to the Y2K problem, and the shipment isn’t ready for pickup?

Is it the carrier’s fault if the load never arrives and the contract is breached? Can a trucking company be held accountable for the failure of a vendor to handle Y2K compliance issues?

It remains to be seen if Y2K’s bite will be as dangerous as its bark, and apocalyptic predictions may never become reality. Nevertheless, some experts are warning trucking to prepare for the worst.

“The transportation industry has some of the more unique (Y2K) issues because they are reliant on everybody else for everything they do,” said Ray Farrell, a senior vice president at a brokerage firm in Kansas City, Mo. “The insurance industry is spending a lot of time debating this subject.”

For the full story, see the Feb. 22 print edition of Transport Topics. Subscribe today.