Data breaches are affecting businesses every two seconds, and will cost them $265 billion by 2031. It’s not a surprise that distributors are offering a new kind of warranty to their customers. These warranties are designed to minimize the risk of economic loss resulting from cyberattacks, by transferring the responsibility of the MSP to the vendor. They are often used to supplement cybersecurity insurance policies and fill in gaps where they not be sufficient.
A data security assurance can help businesses secure their private information from online dangers. However not all warranties are the same. Some warranties have strict conditions that could force a company to pay a steep cost for information retrieval if there is an incident.
For example, a manufacturer’s suggestions on machine use can prevent an insurance policy from covering the cost of replacing or perhaps repair of devices in the event of an unexpected issue. A “as-is” warranty disclaimer allows the vendor to avoid liability in the event that a buyer discovers unexpected defects after taking possession of a particular product.
The best cyber warranties incentivize businesses to implement and follow rigorous security protocols as a condition of coverage. They can be a valuable tool to increase the efficiency of your company’s cybersecurity strategy. Bottom line, insurance covers the risks of something happening. The warranty ensures that it will. That’s a big difference an environment where the consequences of a cybersecurity technology malfunction could be catastrophic.