Data Safety Warranties – Are All Cybersecurity Warranties Created Equal?

With data loss impacting companies every two seconds and expected to price businesses $265 billion by 2031, it’s not surprising that distributors are offering customers the most current type of warranty that includes a cybersecurity guarantee. These warranties are intended to limit the economic risk caused by cyberattacks. They remove by copying liability to the vendor, usually providing the gaps in insurance that may not be able to cover a loss.

However, as with any other type of warranty however, not all cybersecurity warranties are created equal. Certain warranties have strict stipulations that could keep your business paying a substantial amount for data return, especially if you’re not aware of the details. The majority of warranties on technology, for example that limit payments based on how much the vendor has invested in their product. This isn’t helpful as the value of a single record in your Cohesity FortKnox might be much more than the sum of money spent on licensing fees with a specific technology vendor.

For instance, if an existing Rubrik customer and are not able recover your data because of a ransomware attack their warranty will cover for what they call “Recovery Incident Costs.” However they will require receipts for the amount of hours employees are required to spend on the recovery. This is a alarm because the price of lost employee productivity could be much higher than the total amount of time that the software was used during the period. In this way, including representations and warranties that concentrate on the lawful processing of data all the way down to the smallest part of a business could help to reduce the risk of financial loss when it comes to M&A transactions.

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