Data loss is estimated to cost businesses $265 Billion by 2031. It’s no surprise that more distributors provide buyers a new kind of warranty called the cybersecurity warranty. The purpose of these warranties is to limit the financial risks associated with cyberattacks and breaches These warranties are usually an addition to cybersecurity insurance. They can help fill in the gaps where insurance cannot provide protection.
These warranties aren’t all the same. Certain warranties come with strict terms that can cost https://toptechno24.com companies a amount of money to retrieve information in the event of a cyber attack occurs. These may include:
This type of warranty could be included in a technology M&A agreement to ensure that the buyer is secured from security threats and that the vendor is taking steps to avoid future attacks. These new warranties in addition to the usual representations and warranty clauses in an asset purchase agreement or stock purchase contract could be negotiated so that they include privacy, data protection, and other relevant concerns specific to the transaction.
A typical warranty covers the cost of repair and replace equipment, as well as IT labor, forensics and compensation for individuals affected by the breach. Some warranties also cover legal costs that could arise from lawsuits. A more comprehensive plan could also cover lost business revenue as well as the cost of reprogramming software and cost of repairing reputational damage that results from an incident of security.