What the form is
The FP 10 21, titled "Exclusion of Certain Computer–Related Losses," is an endorsement used in farm insurance policies. Its primary function is to exclude coverage for losses or damages that arise from a computer system's failure to accurately handle calendar dates. This was a significant concern leading up to the year 2000 (commonly known as Y2K). The endorsement specifies that risks associated with computer or other electronic equipment failure, malfunction, or inadequacy due to the inability to correctly recognize, process, distinguish, interpret, or accept one or more dates or times are excluded from coverage.
Classes of business it applies to
This endorsement is specifically designed for use with farm insurance programs. It applies to agricultural businesses and farming operations that would be insured under such programs. For example:
- Farms relying on computerized systems for irrigation, feeding schedules, climate control in barns, or general record-keeping.
- Agricultural businesses that might have faced disruption if their computer-dependent equipment malfunctioned due to date-processing errors.
Special considerations
The FP 10 21 is a restrictive endorsement, meaning it limits or removes coverage rather than adding it. While its development was spurred by the Y2K event, its language may apply to other date-related computer processing failures. Some insurance companies, like Oregon Mutual Insurance, mandated the attachment of this endorsement to policies containing farm property coverage forms. Although the immediate Y2K concern has passed, the endorsement might still be part of older policy forms or specific carrier requirements.
Key information for agents and underwriters
For Agents: It's important to explain to insureds that this endorsement means certain types of computer-related losses, specifically those tied to date recognition failures, are not covered. While the Y2K event is historical, if this form is still active on a policy, it represents a specific gap in coverage for date-related computer malfunctions.
For Underwriters: This endorsement was a tool to mitigate the widespread, systemic risk anticipated with Y2K. Its presence on a policy clearly defines the insurer's non-liability for such specific computer failures. When reviewing older policies or programs where this endorsement might still be attached, underwriters should note this exclusion, even if the perceived risk from Y2K-type events has diminished. The continued applicability would depend on the specific wording and any superseding endorsements or policy language.