A warranty is a representation from a seller or manufacturer that the item purchased is free of defects or flaws for a specific length of time. In the context of M&As in technology warranties are typically utilized to control security and data availability risk.
With ransomware-related attacks expected to target a company each two seconds and expected to expense businesses $265 billion by simply 2031, it’s no surprise that more distributors are offering their customers a brand new kind of guarantee called a data safety guarantee. These guarantees lower the financial risks associated with cyberattacks and breaches by transferring legal liability to the vendor and are usually provided as an additional benefit to cybersecurity insurance, helping fill the gaps in coverage where it may not be sufficient.
The specifics of a security assurance vary significantly, but they typically include shortage of business revenue, extra expenses incurred and reputational damage caused by a breach. The policy may also cover legal liability. This covers the costs of notifying those affected by an attack as well as any fines go to this website and charges resulting from lawsuits that could be filed.
While the concept behind a data security warranty is a good one, many of them are flawed. Consider the example of Rubrik that offers a “Recovery Incident Warranty.” This warranty pays for what they describe as “Recovery Incident Expenses.” But that doesn’t mean your employees are paid for the hours spent in a recovery situation. To allow Rubrik to pay up, they need receipts for these expenses, which is an indicator.