National Report

A Michigan trial court has dismissed an action by a school district seeking coverage of year 2000 remediation expenses from a statewide insurance pool. In School District of City of Royal Oak v. MASB-SEG Property and Casualty Pool Inc., Oakland Co. Circuit Court Judge Gene Schnelz agreed with arguments presented by the insurer that the district‘s costs to upgrade its computers did no constitute unexpected loss, as there had been warnings about potential Y2K problems long before January 1, 2000. Over a number of years, MASB-SEG had issued policies to the Royal Oak school district, as well as hundreds of others throughout Michigan. Coverage included damage or injury to property from faulty construction or design errors in computer programs and electronic data processing systems and equipment.