With data loss impacting a business every two seconds and predicted to cost businesses $265 billion by 2031 So, it’s not surprising that more distributors are offering consumers an entirely new type of warranty which is called the cybersecurity warranty. Created to help mitigate the financial risks associated with cyberattacks and breaches, these warranties are typically used in conjunction with cybersecurity insurance, and can to fill in the gaps when insurance does not provide security.
However they’re not all created to be equal. Some have strict stipulations which could lead to companies paying a big price tag for information retrieval in the event of a cyber invasion. These may include:
Incorporating this type of warranty into an M&A deal is an excellent method of ensuring that the buyer has adequate protections against security risks that could arise, and that the vendor will take measures to prevent such attacks from happening in the near future. In addition to the normal representations and warranties in the asset or stock purchase agreement, these warranties can be discussed to address privacy, data security, and other relevant issues that are specific to the transaction at hand.
A typical warranty will cover the cost of repairing and replacing hardware as well https://toptechno24.com/how-to-remove-the-avast-email-signature/ as the cost of forensics and IT work to retrieve data, and the costs of compensating individuals who are affected by a breach. Some also cover the cost of legal expenses resulting from potential lawsuits. A more comprehensive version may also be able to cover the loss of revenue and the cost of programming the software and also the cost to restore reputational damage that was caused by a security incident.
