This video blog looks at fault detection and error handling.  The included images of State Machines show templates for how I generally model fault detection algorithms.

In this first example there are two things to note:

1. Debounce protection:  Returning from “move to fault” and “no fault.”  The signal needs to fall below the trigger signal – a delta to the signal.  This prevents “jitter” in the signal.  (Green circle.)
2. Temporal logic:  The move to “in fault” only takes place after you have held the fault condition as true for a set period of time. (Orange circle and black circle.)

The next example is more complex; in this example, a single variable “engine temp” can result in two different error modes.  “High Temp” or “Critical High Temp.”  In reality, the pattern is a slight variation on the previous version however it shows how it can be expanded to more complex fault conditions.