With data loss impacting an organization every second and estimated to cost businesses $265 billion by 2031, it’s not surprising that distributors are offering customers the most current type of warranty which is the cybersecurity guarantee. These guarantees are designed to limit the economic consequences of cyberattacks and shift liability to the vendor. They often fill in the gaps left by insurance.
However, just like any other warranty however, not all cybersecurity warranties are alike. Certain warranties come with strict conditions that could keep your business paying a large price towards information that is returned, particularly in the event that you aren’t aware of the specifics. For instance, the majority of warranties for technology restrict payment by the amount that the provider spent on their solution. This is not very helpful as the value of a particular record in Cohesity FortKnox may be more than the cost of a license to a technology company.
For instance, if a Rubrik customer and you’re not able to retrieve your data because of an attack by ransomware their warranty will cover for what they call “Recovery Incident Costs.” However they need receipts for the amount of hours employees have to devote to the recovery. This is a major warning because the cost of lost productivity by employees could be much higher than the total amount of time that the software was used during the period. Incorporating representations and warranties that focus on the legal processing of data up to the most distant section of a business can reduce costly risk during M&A deals.