It’s no surprise that more distributors offer buyers the latest warranty that includes cybersecurity. Data loss is expected to cost businesses $265 billion in 2031. These warranties are designed to minimize the economic risk of cyberattacks, and shift responsibility to the vendor. They are often used to fill https://toptechno24.com/board-meeting-minutes-legal-requirements-to-achieve-in-board-of-directors-software the gaps left by insurance.
However, just like any other warranty however, not all cybersecurity warranties are made equal. Certain warranties have strict stipulations which could leave your business paying a significant amount for data return, especially if you’re not aware of the details. The majority of warranties on technology, for example, limit payment based upon how much the vendor has invested in their product. This is not helpful since the value of a single entry in your Cohesity FortKnox might be much higher than the total amount spent on license costs for a particular technology vendor.
For example, if you’re an existing Rubrik customer and you’re not able retrieve your data because of an attack by ransomware their warranty will pay for what they call “Recovery Incident Expenses.” However they require receipts for the amount of hours employees spend on the recovery incident. This is a red flag because the cost of reduced productivity for employees could be much higher than the total amount of time that the software was used during the period. In this way, incorporating representations and warranties that concentrate on the legal processing of data right down to the most remote part of a business can reduce the risk of financial loss in M&A transactions.