Overview

Over time, security budgets have diminishing returns. At some point, no increase in resources will reduce the risk of a negative consequence. That’s why cybersecurity insurance exists — to protect against the eventuality of a data breach. That’s also why some vendors have seized on the idea of guaranteeing the efficacy of their products through technology warranties.

To many, such warranties are a marketing ploy — a tactic meant to shift attention from a vendor’s competitors in a crowded marketplace. But to others, warranties are a sign that vendors are shifting their incentives — putting more than just their reputations on the line. This report will focus on the latter and attempt to elucidate the value of these warranties for both technology buyers (of a certain size) and sellers.

Key questions discussed in this report:

  • What is a technology warranty? 
  • What is the value of such a warranty when backing a security product?
  • What kind of FIs might find value in security technology warranties? 
  • How are these warranties being underwritten? 
  • And why are so few security vendors offering this type of added insurance? 


Methodology

Javelin conducted a series of interviews involving insurance executives, cybersecurity vendor executives, and other relevant stakeholders to gain an understanding of the topic. Interviewees represented a variety of organizations, including those that have written technology warranty policies. 

Data in this report is based on information collected in a random-sample panel of 800 information technology security decision-makers, 200 of whom work in financial services. For questions answered by all 800 survey respondents, the maximum margin of sampling error is ±3.46 percentage points at the 95% confidence level. For questions answered by all 200 financial services respondents, the maximum margin of sampling error is ±6.93 percentage points at the 95% confidence level. The maximum margin of sampling error is higher for questions answered by segments of respondents.