With data loss impacting a business every two seconds and projected to cost businesses $265 billion by 2031, it’s no wonder more distributors are offering consumers a brand new type of guarantee which is called the cybersecurity warranty. These warranties are designed to lower the financial risk of cyberattacks and they’re often a complement to insurance. They cover the gaps that insurance doesn’t https://www.toptechno24.com/how-to-achieve-express-warranty-agreement-using-data-room-services cover.
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. These may include:
This kind of warranty can be included in the technology M&A agreement to ensure that the buyer is protected from potential security threats and that the vendor takes measures to prevent future attacks. These new warranties, in addition to the usual representations and warranty clauses in an asset purchase agreement or stock purchase contract could be negotiated so that they cover privacy, data protection and other issues specific to the transaction.
A typical warranty covers the cost to repair or replace equipment, as well as the cost of forensics, IT labor, and also compensation for people affected by a breach. Some warranties also cover legal expenses resulting from possible lawsuits. A more comprehensive version could also pay for lost revenue, the cost of reprogramming the software and also the cost to restore reputational damage caused by an incident involving security.