With data loss impacting businesses every two seconds and expected to price businesses $265 billion by 2031, it’s no wonder more distributors are offering buyers the most recent kind of warranty: the cybersecurity guarantee. These warranties are designed to minimize the economic risk of cyberattacks and transfer responsibility to the vendor. They are often used to fill the gaps left by insurance.
Nevertheless the warranties offered for cybersecurity are created equal. Some warranties have rigid conditions that can cost your business lots of money if you don’t read the fine in the fine print. Most warranties for technology, for instance have a limit on the amount of money you pay based on the amount of money that the company invested in their product. This is not a great idea since the value of a single record in Cohesity FortKnox may be more than the amount of license fees paid to a technology vendor.
This is a red flag because the cost of losing employee productivity could be much higher than the total amount of time that the software was in use during the period. This is a red flag because the cost of lost productivity of employees could be significantly higher than the time they spent using the software in that period. Incorporating representations and warranties that concentrate on the legal processing of data to the smallest section of a business can lower the risk of costly losses in M&A deals.
