With data loss affecting an organization every two seconds and predicted to cost businesses $265 billion by 2031, it’s not surprising that distributors are providing buyers with the latest type of warranty: the cybersecurity guarantee. These warranties are designed to mitigate the economic risk of cyberattacks and transfer responsibility to the vendor. They often fill the gaps left by insurance.
However there are many different warranties for cybersecurity are created equal. Certain warranties have strict terms that could keep your business paying these details a large price towards information being returned, especially when you’re not familiar with the details. Most technology warranties, for example are based on how much the provider invested in their solution. This is not helpful since the value of a single file in your Cohesity FortKnox might be much more than the total amount paid for licenses with a particular technology vendor.
This is a big warning because the cost of lost productivity of employees could be higher than the total amount of time that the software was in use during that period. This is a red flag, because the price of lost productivity by employees could be significantly higher than the time spent using the software during the period. In this way, incorporating representations and warranties that concentrate on the legal processing of data right down to the smallest part of a business will help minimize costly risks when it comes to M&A transactions.