Vulnerabilities / Threats
10/31/2011
12:52 PM
Connect Directly
RSS
E-Mail
50%
50%

Data Breach Costs: Beware Vendor Contract Fine Print

Organizations often end up paying the consequential costs of data breaches when third-party vendor contracts aren't scrutinized.

My Mistake: 10 CIOs Share Do-Over Worthy Moments
Slideshow: My Mistake: 10 CIOs Share Do-Over Worthy Moments
(click image for larger view and for slideshow)
Whether it's from a vendor improperly securing database information it's hosting for a customer or a storage company that leaves backup information unlocked in a truck, data breaches caused by third parties happen all the time. If organizations are not careful in the way they construct their contracts with those vendors, the organization itself could end up being on the hook for far more of the breach liability than it expected. But if they do it right, they could use that contract as a tool to mitigate risk to their organization.

"As it currently stands, the focus of risk mitigation with respect to security are technical controls and other security measures, and the importance of the contract as a risk mitigating tool is overlooked," said David Navetta, founding partner of the Information Law Group. "As litigation increases in this area, for risk-conscious organizations, the protections in the service provider contracts are going to become very important."

Litigation in these cases of third-party breaches is a common occurrence, frequently with the third-party organization ducking under the radar as their customer gets hammered by class action suits. For example, when a breach that exposed data for 4.9 million active and retired U.S. military personnel was caused by the theft of backup tapes from the car of an employee at Science Applications International Corp. (SAIC), working on behalf of Tricare, in September, the $4.9 billion lawsuit by affected individuals filed last week was lodged against TRICARE and the Department of Defense, not SAIC.

Similarly, Stanford Hospital had a $20 million lawsuit filed against it after an employee at its billing contractor, Multi Specialties Collection Services (MSCS) inadvertently posted patient information on a homework help site online. Stanford has been on a publicity blitz claiming its outsourcer was totally to blame for the breach.

In most cases like those, the details of the actual contract between the organization and the supplier never really become public. Typically they're buried in closed settlement deals and kept locked down with non-disclosures. But John Nicholson, counsel for the global sourcing practice at the Washington, D.C.-based law firm of Pillsbury Winthrop Shaw Pittman, said that suppliers frequently evade the bulk of liability due to poorly drafted service contracts.

Read the rest of this article on Dark Reading.

Comment  | 
Print  | 
More Insights
Register for Dark Reading Newsletters
Partner Perspectives
What's This?
In a digital world inundated with advanced security threats, Intel Security seeks to transform how we live and work to keep our information secure. Through hardware and software development, Intel Security delivers robust solutions that integrate security into every layer of every digital device. In combining the security expertise of McAfee with the innovation, performance, and trust of Intel, this vision becomes a reality.

As we rely on technology to enhance our everyday and business life, we must too consider the security of the intellectual property and confidential data that is housed on these devices. As we increase the number of devices we use, we increase the number of gateways and opportunity for security threats. Intel Security takes the “security connected” approach to ensure that every device is secure, and that all security solutions are seamlessly integrated.
Featured Writers
White Papers
Cartoon
Current Issue
Dark Reading's October Tech Digest
Fast data analysis can stymie attacks and strengthen enterprise security. Does your team have the data smarts?
Flash Poll
Video
Slideshows
Twitter Feed
Dark Reading - Bug Report
Bug Report
Enterprise Vulnerabilities
From DHS/US-CERT's National Vulnerability Database
CVE-2014-7877
Published: 2014-10-30
Unspecified vulnerability in the kernel in HP HP-UX B.11.31 allows local users to cause a denial of service via unknown vectors.

CVE-2014-3051
Published: 2014-10-29
The Internet Service Monitor (ISM) agent in IBM Tivoli Composite Application Manager (ITCAM) for Transactions 7.1 and 7.2 before 7.2.0.3 IF28, 7.3 before 7.3.0.1 IF30, and 7.4 before 7.4.0.0 IF18 does not verify X.509 certificates from SSL servers, which allows man-in-the-middle attackers to spoof s...

CVE-2014-3668
Published: 2014-10-29
Buffer overflow in the date_from_ISO8601 function in the mkgmtime implementation in libxmlrpc/xmlrpc.c in the XMLRPC extension in PHP before 5.4.34, 5.5.x before 5.5.18, and 5.6.x before 5.6.2 allows remote attackers to cause a denial of service (application crash) via (1) a crafted first argument t...

CVE-2014-3669
Published: 2014-10-29
Integer overflow in the object_custom function in ext/standard/var_unserializer.c in PHP before 5.4.34, 5.5.x before 5.5.18, and 5.6.x before 5.6.2 allows remote attackers to cause a denial of service (application crash) or possibly execute arbitrary code via an argument to the unserialize function ...

CVE-2014-3670
Published: 2014-10-29
The exif_ifd_make_value function in exif.c in the EXIF extension in PHP before 5.4.34, 5.5.x before 5.5.18, and 5.6.x before 5.6.2 operates on floating-point arrays incorrectly, which allows remote attackers to cause a denial of service (heap memory corruption and application crash) or possibly exec...

Best of the Web
Dark Reading Radio
Archived Dark Reading Radio
Follow Dark Reading editors into the field as they talk with noted experts from the security world.