How can you manage cyber threats and data breaches in IT sourcing contracts?

IF we have learned one thing from MOVEit or Connectwise, it's that supply chain cyber incidents are a major threat and vendor management must include consideration for their security risks and the data that the vendor interacts with. Please Please Please ask whether the vendor has insurance coverage for the issue. If you have a 3rd party resource that impacts your business WITHOUT cyber insurance or a plan for alternative business continuity - this is only going to look back to your customers. And you will be stuck with less information an less control on the "breach narrative". Protect yourself with the questions up front. Ask for confirmation of insurance coverage.

Evaluate the provider's security capabilities by reviewing their track record, certifications, and adherence to industry standards. Assess their incident response plans, data encryption practices, and employee training programs. Verify compliance with relevant regulations and scrutinize their security infrastructure, including firewalls and access controls. Thoroughly examine their vulnerability management and risk assessment processes to ensure a comprehensive approach to cybersecurity.

The easiest answer is to call #TheDataLawyer 🤗 but truly, data integrity, data risk and the utilizing new technologies comes with its own (if not more) risk. This risk leads to serious business interruption from a monetary and operational aspect. Keeping lawyers in the mix from the get go is really important especially because when it comes to liability, the emphasis will always be on the controller/business. Just because you may move your risk profile away from yourself and onto the IT source provider, doesn’t mean the regulator will view it that way. It’s always going to be your responsibility which means you need to ask your IT the hard questions of what are you going to do, do you have an IRP, insurance, cost covering?

I will add here with my experience that please also see how futuristic is the provider. For example the vendor may be compliant with GDPR but then India is now going in for DPDPA and now what will you do if the provider doesnt have the capability and your contract doesnt mention of the upgradation by the provider. So to conclude pls see the capability of the vendor to evolve and adapt and as a user/buyer you pls keep relevant clauses in contract to get that edge over the provider.

Establish clear security roles and responsibilities in IT sourcing contracts by delineating specific duties for both the client and provider. Define who is accountable for incident response, vulnerability management, and ongoing monitoring. Clarify roles related to access control, data encryption, and compliance with security standards. This ensures a transparent understanding of each party's obligations, fostering a collaborative and secure environment. Regularly review and update these roles to adapt to evolving cyber threats.

when we talk about clear security roles, we firstly need to identify all the stakeholders with due diligence. We need to have clear responsibility specially for the incident response part, data protection, violation of compliance, process if reporting and SLA non adherence penalties. Last but not the least is the responsibility of regular review and updation of the roles and responsibilities of both the parties.

Incorporate comprehensive security clauses and remedies in IT sourcing contracts. Specify security requirements, such as encryption standards and access controls. Define breach notification procedures, outlining timeframes and communication protocols. Clearly articulate remedies for non-compliance, including penalties or termination clauses. Establish a framework for addressing breaches, ensuring timely response, investigation, and resolution. Regularly review and update security clauses to align with evolving cyber threats and industry best practices.

Monitoring and management are two distinct things and both require dedicated effort. For monitoring the security performance we need to identify the KPIs and carry out continuous monitoring, besides of course the measure of actual security incidents. For managing security performance you need to be continuously training and creating awareness among the employees. Regularly communicating the activities and reporting is an important aspect towards managing the security performance. Last but not the least for monitoring and managing security performance is perform and reform, i.e. do your tasks, learn and reform/improve.

The plan and the subsequent response has to be based on a detailed risk assessment. The risk assessment form the base for the incident response plan which has to be implemented by an incident response team. Wat i can say with honesty that most of the incident response plans dont behave as desired owing to communication failures so you need to rehearse and preserve your plan. in addition to communication plan rehearsal, you also must practise incident response plan regularly. The responsibility of all stakeholders should be repeatedly rehearsed.

To manage cyber threats and data breaches in IT sourcing contracts: Include specific cybersecurity requirements and compliance standards. Define clear incident response protocols and responsibilities. Establish regular security audits and assessments. Incorporate liability clauses and penalties for security breaches. Ensure the right to terminate the contract in case of non-compliance with security requirements.

Protect IT sourcing contracts from cyber threats by adding strong security clauses, regularly checking for weaknesses, encrypting sensitive data, ensuring compliance with regulations, and having a plan ready to tackle breaches swiftly. It's like building a fortified castle – secure, compliant, and ready to defend against digital invaders.