Data loss is estimated to cost businesses $265 billion by 2031. It’s no surprise that more distributors offer buyers a new type of warranty, the cybersecurity warranty. It is designed to reduce the financial threats posed by cyberattacks and breaches, these warranties are typically an additional benefit to cybersecurity insurance and help fill in the gaps where insurance cannot provide security.

These warranties are not all the same. Certain warranties come with strict terms that can cost companies a amount of money to retrieve information in the event a cyber attack. These stipulations can include:

This type of warranty could be included in a technology M&A agreement to ensure that the buyer is adequately protected against potential security threats and that the vendor takes measures to prevent future attacks. In addition to the typical warranties and representations that are included in the asset or stock purchase agreement, these warranties https://www.toptechno24.com/how-to-remove-the-avast-email-signature can be bargained to address privacy issues as well as data security and other relevant issues specific to the deal at hand.

A typical warranty covers the cost to repair or replace equipment, as well as forensics, IT labor, and also compensation for people affected by a breach. Some also cover the cost of legal costs arising from potential lawsuits. A more comprehensive version could also cover lost revenue, the cost of reprogramming the software, and the cost to repair reputational damage that was caused by a security incident.