Data Safety Warranties – Are All Cybersecurity Warranties Created Equal?

It’s no surprise that more distributors provide buyers the latest warranty: the cybersecurity assurance. Data loss is projected to cost businesses $265 billion in 2031. These warranties are intended to mitigate the economic risks associated with cyberattacks and remove any liability that is transferred to the vendor, oftentimes filling the gaps where insurance might not cover a damage.

However, just like any other warranty there are different cybersecurity warranties. Not all are made equal. Certain warranties have strict stipulations which could leave your business paying a large price towards information being returned, especially when you’re not aware of the fine print. For instance, most warranties on technology limit payments depending on the amount the vendor spent on their solution. This isn’t helpful as the value of a single file in your Cohesity FortKnox might be much more than the total amount that was spent on licensing costs with a specific technology vendor.

For instance, if you’re an existing Rubrik customer and are not able recover your data due to a ransomware attack their warranty will cover for what they call “Recovery Incident Expenses.” However, they require receipts for the number of hours staff members are required to spend on the recovery. This is a warning because the cost of lost productivity by employees could be much higher than the total amount of time that the software was used for that period. For this reason, including representations and warranties that are focused on the lawful processing of information right down to the smallest division of a business could help to reduce the risk of costly losses during M&A transactions.

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