Data loss is expected to cost businesses $265 Billion by 2031. It’s no surprise that more distributors provide buyers a new type of warranty, the cybersecurity warranty. The purpose of these warranties is to limit the financial threats posed by cyberattacks and breaches These warranties are usually a complement to cybersecurity insurance and fill in the gaps where insurance doesn’t offer protection.

However they’re not all created equally. Certain warranties come with strict https://www.toptechno24.com/intensive-complex-performance-with-virtual-data-room terms that can cost companies lot of money to retrieve information in the event a cyber attack occurs. These stipulations could include:

This type of warranty could be included in a technology M&A agreement to ensure that the buyer is secured from security threats and that the vendor takes steps to safeguard against future attacks. These new warranties along with the usual representations and warranty clauses in an asset purchase agreement or stock purchase contract can be negotiated so that they deal with privacy, data security and other pertinent issues specific to the deal.

A typical warranty covers the cost to repair and replace hardware, the cost for IT labor, forensics, and compensation for individuals affected by the breach. Some also cover the cost of legal fees resulting from potential lawsuits. A more comprehensive policy could also cover lost business revenues, the costs of reprogramming software, and the cost to repair reputational damage resulting from a security event.