A warranty is a representation by a seller or manufacturer that goods purchased are free from defects or flaws for a specific length of time. In the context of M&As in technology they are typically employed to mitigate cybersecurity and data availability risks.

Security warranties for data are becoming more popular among distributors. With ransomware projected to cost businesses $265 billion in 2031 and a trend to attack every two seconds, it is no surprise that they offer this new assurance to their clients. These guarantees reduce economic risks related to cyberattacks by shifting legal responsibility to the vendor. They are typically provided as an additional benefit to cybersecurity insurance to fill in gaps in coverage that may not be sufficient.

Security guarantees vary in their terms and typically include the loss of revenue for a company and the additional expenses that are incurred and reputational damage that is caused by the breach. They could also include a policy intended to protect legal liability, which covers the costs of letting those affected by an attack to be identified as well as any penalties or fines resulting from lawsuits that could be filed.

While the idea behind a data security warranty is an excellent one, the majority of them aren’t as good. Rubrik offers a “Recovery https://www.toptechno24.com/how-to-achieve-express-warranty-agreement-using-data-room-services Incident warranty” which covers “Recovery incident expenses.” However it does not mean that your employees will be paid for the time spent on a recovery. Rubrik will only pay the expenses if they have receipts for the expenses. This is a red flag.