Which type of loss is NOT typically covered under an EDP policy?

An EDP (Electronic Data Processing) policy is designed to cover specific types of losses associated with electronic data and the equipment used to process that data. It often provides coverage for physical damage to equipment, lost income due to system failures, and potentially data breaches—depending on the specific terms of the policy.

Regulatory fines and penalties, however, are generally not covered under EDP policies. These types of losses arise from violations of laws or regulations, which are excluded in many insurance policies because they are considered to be a part of the policyholder's legal obligations. Insurers typically do not cover costs related to regulatory compliance failures, which can include fines and penalties as these are seen as the result of poor management or operational decisions rather than unforeseen physical loss or damage to physical assets.

Understanding the distinction between tangible losses like equipment damage and more abstract financial penalties is crucial for policyholders to ensure they have proper insurance coverage for their specific exposures.