A warranty is a guarantee from a manufacturer or seller that the products purchased are free of defects or flaws for a certain period of time. In the context of technology mergers and acquisitions warranties are frequently used to address security and data availability risks.
Security warranties for data are becoming more popular with distributors. With ransomware expected to cost businesses $265 billion in 2031 and the potential to attack every two seconds, it’s no surprise that they offer this new assurance to their clients. These guarantees help reduce the economic risk caused by cyberattacks, as they transfer legal responsibility to the vendor. They are typically offered as a complement to cybersecurity insurance to cover gaps where insurance coverage might not be enough.
The exact terms of a security warranty vary in a variety of ways, but they generally contain a shortage of revenue for business, extra expenses incurred and reputational damage that results from the breach. They may also include policies intended to protect legal liability, which covers the costs of letting the victims of an attack to be informed as well as any fines or charges that result from potential lawsuits.
While the idea behind a data security warranty is a good one, many of them aren’t as good. Rubrik offers a “Recovery Incident warranty” which covers “Recovery Incident expenses.” However it does not mean your employees will be paid for the time they spend in a recovery. For Rubrik to be able to pay, they need receipts for these expenses which is a bit of Recommended Reading an indicator.