Incident Response: Do Your Vendor Contracts Have Claws (for Liability)?
July, 2018, Doug Hudson, Senior Director, Cyber Risk Advisory, Coalfire
In previous blogs, we’ve discussed some of the struggles organizations have when responding to cyber incidents. For many, it is the recovery aspect, and specifically vendor liability for the data or privacy breach, that poses many questions. In trying to assign liability, the obvious place to start is the contract with the vendor. Generally, most vendor contract language limits liability to some small percentage of the contract value, and most contracts have limited liability clauses that completely remove vendor liability relating to damages even if the vendor is negligent in its implementation of the product or service.