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data processors errors and omissions coverage

Data processors errors and omissions (E&O) coverage insures liability arising from errors and omissions in performing data processing for outside entities on a fee basis.

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Coverage is usually on a claims-made form. The policy provides no coverage for bodily injury (BI) or property damage (PD) liability, which can create a coverage gap for certain data processing applications—for example, in medical analysis whereby an error in a diagnostic computer program causes BI. Further, when one organization provides services for sister companies or its own subsidiaries, coverage would not normally apply to E&O claims by these companies or subsidiaries.