With data loss impacting a business https://toptechno24.com/how-to-connect-your-nintendo-switch-to-the-tv/ every second and estimated to cost businesses $265 billion by 2031 So, it’s not surprising that more distributors are offering consumers the latest type of warranty which is called the cybersecurity warranty. These warranties are designed to minimize the financial risk of cyberattacks and often serve as a complement to insurance. They cover the gaps left by insurance.
These warranties are not all the same. Some warranties have rigid conditions that can cost companies amount of money to retrieve information in the event a cyber attack. The stipulations could include:
This type of warranty can be included in an IT M&A agreement to ensure that the buyer is adequately protected from potential security threats and that the vendor is taking steps to avoid future attacks. These new warranties along with the standard representations and warranty clauses that are included in an asset purchase agreement or stock purchase contract, could be negotiated so that they include privacy, data protection as well as other concerns specific to the transaction.
A typical warranty may include the cost of repairing and replacing equipment, the cost of forensics and IT labor to recover data, and the cost of remuneration for individuals impacted by a breach. They also cover the costs of legal expenses resulting from potential lawsuits. A more comprehensive version might also pay for lost revenue and the cost of reprogramming the software and the cost to restore reputational damage resulting from an incident involving security.