Lemons and Liability: Cyber Warranties as an Experiment in Software Regulation
summary
Several security vendors voluntarily promise payouts for product failures and this paper measures that experiment: warranties begin at Black Hat 2014 (WhiteHat $250k then $500k) and later include $1 million warranty offerings from SentinelOne and CrowdStrike; roughly 25% of endpoint products now carry warranties and at least 15 more warranties appear since 2014. Preliminary evidence shows higher customer ratings for warrantied products, payouts are rare or narrowly defined, and design questions remain about safe‑harbor rules, scope, open‑source exclusions and proof burdens.
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chapters (6)
- 0:00Introduction and economics
- 2:27The lemons market in security
- 7:56Analyzing cyber warranties
- 13:09Critiques of warranties
- 19:18Designing liability regimes
- 24:37Key takeaways and Q&A
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