Determining the Accuracy of DNA Testing
Essentially, yes. These tests are usually based on enzymes that replicate DNA, and they have a certain (small) probability of getting a base wrong now and then. You can estimate the error frequency by doing many repetitions of sequencing of the same DNA sample and counting the number of discrepancies. Of course, this assumes that there are no systematic errors, only random variation, which may not be entirely true.

The Sanger sequencing technique is estimated to have error rates on the order of 0.001% (or, is 99.999% correct). I don't know exactly how these firms calculate their numbers, but I would guess it is similar.