Data Safety Warranties – Are All Cybersecurity Warranties Created Equal?

With data loss affecting a company every second and estimated to cost businesses $265 billion by 2031, it’s no wonder distributors are now offering buyers the most recent type of warranty: the cybersecurity guarantee. These guarantees are designed to limit the economic risk of cyberattacks and eliminate any liability that is transferred to the vendor, oftentimes filling the gaps where insurance could not cover a particular damage.

But, just like other type of warranty there are different cybersecurity warranties. Not all are created equal. Certain warranties come with strict terms that could cost your company a lot of money in the event that https://www.toptechno24.com/how-to-achieve-express-warranty-agreement-using-data-room-services you don’t understand the fine terms. The majority of warranties for technology, for instance that limit payments based on the amount of money that the company invested in their product. This is not very helpful because the value of one record in Cohesity FortKnox may be more than the license costs paid to a technology company.

For instance, if an Rubrik customer and you’re not able recover your data due to an attack by ransomware their warranty will pay for what they call «Recovery Incident expenses.» However they will require receipts for the amount of hours staff members devote to the recovery process. This is a red flag, because the cost of lost productivity by employees could be significantly higher than the time spent using the software during that period. Incorporating representations and warranties that focus on the legal handling of data down to the smallest department of a company could reduce costly risk during M&A deals.