Developing an Information Security and Privacy Schedule for Service Provider Transactions (Part Two) : Info Law Group

Developing an Information Security Privacy Schedule for Service Provider Transactions by David Navetta.

This article points out the need for customers to develop Information Security and Privacy Schedules as part of their Service Provider agreements. As more and more of our Information Technology and Information Security moves to out sourced technologies, customers need to be aware that not only are they still responsible for the privacy and security of their data, but may be undertaking the risks involved with utilizing the service providers information security environment.

"The Customer should think of the Service Provider's security as an extension of their own internal security." IT Services and Information Security Management must undertake the security of how the trust relationships with their Service Providers are handled and how those relationships may impact the business, should the Service Provider be compromised or suffer a breach.

In David Navetta's closing statement, he mentions the impact of incidents, not from the initial impact of the exploitation of an exposure but the after effects concerning liability and reputation damage. "First, it is not unusual for a security incident to yield "consequential damages" in addition to "direct damages," including loss of profits, lost customers, attorney fees, breach notice costs and other similar costs. If the overall contract contains a consequential damages disclaimer, the Customer should endeavor to get an exception for consequential damages arising out of a security incident and/or breach of the Schedule."

The credibility and reliability of your information security program is now an integral part of stability and reputation of the business along with how well you are maintaining the trust relationships with your business partners and service providers which are now part of your extended business and control environment. The days of IT involving a few core services are gone and now have been replaced by data moving in and out of the environment for outside processing and storage, site to site vpns, international privacy and security laws of internal, external data and the rise of "Cyber insurance". David's article covers a wide variety of suggestions of what can be included in the Security /Privacy Schedule in contractual agreements with Service Providers.

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