Many large companies are courting disaster because they still have no contingency plans to cope with millennium bug problems, Don Cruickshank, chairman of Action 2000, said today.
Action 2000 is a company set up by the government to advise private sector companies about the millennium bug.
Talking at a press briefing in London, Cruickshank said that despite a number of warnings, 25 per cent of companies in Britain with 250 or more employees and 47 per cent of companies with between 10 and 249 employees, have not started business continuity planning for the millennium, yet none can be sure that the bug will not have an impact on their business.
"It is simply not enough to start remedial work to fix known problems. You also have to start contingency planning," he said.
He also warned that fear of legal problems will force large companies to cut off dealings with other companies in their supply chain.
"If you are a mid sized company and you have not done the remedial work you will not have any contracts. Your contracts will be taken away. Your customers will simply look elsewhere," he said.
He warned that companies failing to deliver on contracts due to millennium related problems could be open to legal action. Only 56 per cent of mid sized companies have sought professional advice on the regulatory requirements for the goods or services they supply and only one third have examined supplier contracts to see how they dealt with the millennium bug, Action 2000 research has found.
"There is still not enough awareness of the legal issues," he said.
Company directors should not rely on insurance policies to save their companies or themselves if disasters do strike, he said.
"Standard insurance policies are not meant to cover the millennium risks and personal indemnity insurance may not cover known risks like Y2K. Attempts to make claims because you haven't done and documented your 2000 work will fail. You must do the work, document it, and have some standard body approve the work," he said.
Cruickshank said Action 2000 is pressing the responsible bodies concerned to name companies which form part of the critical national infrastructure that will not be ready for the millennium, and said he expected them to be announced on 12 July.
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