Errors and omissions clause

An errors and omissions clause provides that a good faith mistake or oversight in administering the treaty does not deprive the cedant of cover, provided it is corrected on discovery. It targets clerical failures: a risk left off a bordereau, a cession entry keyed wrongly, an amount transcribed incorrectly. The problem it solves is the mismatch between fault and sanction: a treaty covering thousands of policies is run by systems and by people, error in it is statistically certain, and forfeiting a multi-million recovery over one mistyped line would turn reinsurance into an administrative lottery. The clause never covers bad faith, nor anti-selection dressed up as error, nor an omission that would have changed the reinsurer's underwriting decision had it been known. That is where the entire body of disputes sits: the boundary between protected clerical error and material non-disclosure, which the clause does not cover and which belongs to the duty of utmost good faith owed to the reinsurer.

A cedant discovers in 2026 that an industrial site insured for 12 million euros was never carried on the treaty's cession bordereaux, through a configuration gap during a January system migration. A fire occurs in April. The errors and omissions clause applies, the cedant regularizes the 47,000 euro cession premium, and the reinsurer takes its share of the 9.3 million loss.

Errors and omissions clause, Clause E&O, Clause d'erreur matérielle, Omission clause