A warranty is a promise from a seller or manufacturer that the products purchased are free of defects or flaws for a specific length of time. In the context of technology mergers and acquisitions warranties are typically utilized to control the risks of cybersecurity and availability of data.
With ransomware attacks expected to strike a business every two seconds and estimated to cost businesses $265 billion in 2031, it’s no surprise that more distributors are offering their customers a brand new sort of guarantee called a data safety guarantee. These guarantees minimize the economic dangers of cyberattacks and breaches by transferring legal liability to the vendor and they’re normally provided as an additional benefit to cybersecurity insurance, assisting in filling the gaps where insurance coverage might not be sufficient.
The actual details of a security assurance vary extensively, but they usually comprise a deficiency in business revenue in addition to additional expenses that are incurred as well as reputational damage caused by the breach. The policy may also cover legal responsibility. It covers the cost of notifying those affected by an attack, as well as any fines or charges arising from potential lawsuits.
While the concept behind a data security policy is an excellent one, many of them aren’t as good. Consider the example of Rubrik that offers a “Recovery Incident Warranty.” The warranty covers for what they call “Recovery Incident Expenses.” However, this doesn’t mean that your employees are compensated for the time they spent in a recovery situation. To allow Rubrik to be able to pay they require receipts for these expenses, which is a bit of an indicator.