1. Forms
2. PR
3. PR-21-05

What the form is

The PR 21 05 "Exclusion--Year 2000 Computer-Related And Other Electronic Problems" is an insurance policy endorsement developed by ISO. Its primary purpose was to explicitly exclude coverage for claims and losses arising from the failure of computer systems, software, embedded chips, and any other electronic equipment to correctly recognize, process, or handle the date change to the year 2000 and subsequent dates (commonly known as the Y2K bug). This form aimed to mitigate the potentially widespread and significant exposures insurers faced due to the Y2K issue in professional liability lines.

Classes of business it applies to

This endorsement was specifically designed to be attached to Professional Liability coverage forms for certain healthcare providers. The targeted classes of business include:

• Allied Health Care Providers Professional Liability
• Optometrists Professional Liability
• Physicians, Surgeons and Dentists Professional Liability
• Hospital Professional Liability

Real-world example: A hospital's patient monitoring system, which relied on date-sensitive software, malfunctions on January 1, 2000, leading to incorrect patient data and subsequent harm. If the hospital's professional liability policy included the PR 21 05 endorsement, the claim arising from this Y2K-related system failure would likely be excluded.

Special considerations

The PR 21 05 was a critical form during the lead-up to the year 2000. Key considerations included:

• Historical Context: The form's relevance is primarily historical, tied to the Y2K event. While the immediate threat has passed, understanding this exclusion can be important for reviewing old policies or understanding historical claim data.
• Mandatory vs. Optional: Depending on the insurer and regulatory environment at the time, this exclusion might have been mandatory or offered as a way to manage Y2K exposure.
• Buy-Back Options: In some cases, limited buy-back coverage for Y2K-related issues might have been available through other endorsements (e.g., PR 04 08), though PR 21 05 itself is an exclusion.
• Specificity: The exclusion was broad, encompassing failures in computer hardware, software, operating systems, networks, microchips, and any integrated computer circuits.

Real-world example: A dental practice using scheduling software that was not Y2K compliant experiences a complete loss of patient appointments and records in early 2000, leading to business interruption and potential patient care issues. A claim for professional liability due to missed or delayed treatments resulting from this software failure would be subject to the PR 21 05 exclusion if the endorsement was part of their policy.

Key information for agents and underwriters

• Risk Assessment (Historical): During its active period, underwriters would have used this form to significantly limit exposure from insureds who had not adequately addressed their Y2K compliance.
• Coverage Gaps: Agents needed to clearly communicate the impact of this exclusion to their healthcare clients, ensuring they understood the significant gap in coverage for Y2K-related professional liability incidents.
• Pricing: The application of this exclusion would have been a factor in pricing professional liability policies at the time, as it removed a substantial potential risk.
• Later Editions: The existence of later edition dates, such as the "09 08" edition found in California filings, suggests that the form or its principles might have been reaffirmed or continued for specific purposes or jurisdictions well after the Y2K event, or it could represent the date of adoption by a particular state. It's important to check the specific edition date applicable to a policy.
• Related Forms: It's important to note that a similar exclusion, PR 21 04, was used for Blood Banks, Diagnostic Testing Laboratories, and Hospital Professional Liability coverage parts, indicating a suite of Y2K exclusions for the healthcare sector.