This work introduces an observer structure and highlights its distinct advantages in fault detection and isolation. Its application to the issue of shorted ts detection in synchronous generators is demonstrated. For the theoretical foundation, the convergence and design of Luenberger-type observers for disturbed linear time-invariant (LTI) single-input single-output (SISO) systems are reviewed with a particular focus on input and output disturbances. As an additional result, a simple observer design for stationary output disturbances that avoids a system order extension, as in classical results, is proposed.