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electronic products errors and omissions insurance

Electronic Products Errors and Omissions Insurance is a policy designed to cover claims in which the malfunctioning or nonfunctioning of electronic products causes financial loss rather than bodily injury (BI) or property damage (PD).

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Assume an accounting software program contains a "bug" that causes a company using the software to understate its receivables by $500,000 during a fiscal year. An electronic products errors and omissions policy would cover the software manufacturer's liability for losses sustained by the customer under these circumstances. Such policies are needed because commercial general liability (CGL) insurance is limited to covering bodily injury and property damage liability, rather than liability for financial loss.