Vulnerabilities / Threats
10/31/2011
12:52 PM
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
Comments
Oldest First  |  Newest First  |  Threaded View
Register for Dark Reading Newsletters
White Papers
Video
Cartoon Contest
Current Issue
Five Emerging Security Threats - And What You Can Learn From Them
At Black Hat USA, researchers unveiled some nasty vulnerabilities. Is your organization ready?
Flash Poll
Dark Reading Strategic Security Report: The Impact of Enterprise Data Breaches
Dark Reading Strategic Security Report: The Impact of Enterprise Data Breaches
Social engineering, ransomware, and other sophisticated exploits are leading to new IT security compromises every day. Dark Reading's 2016 Strategic Security Survey polled 300 IT and security professionals to get information on breach incidents, the fallout they caused, and how recent events are shaping preparations for inevitable attacks in the coming year. Download this report to get a look at data from the survey and to find out what a breach might mean for your organization.
Slideshows
Twitter Feed
Dark Reading - Bug Report
Bug Report
Enterprise Vulnerabilities
From DHS/US-CERT's National Vulnerability Database
CVE-2013-7445
Published: 2015-10-15
The Direct Rendering Manager (DRM) subsystem in the Linux kernel through 4.x mishandles requests for Graphics Execution Manager (GEM) objects, which allows context-dependent attackers to cause a denial of service (memory consumption) via an application that processes graphics data, as demonstrated b...

CVE-2015-4948
Published: 2015-10-15
netstat in IBM AIX 5.3, 6.1, and 7.1 and VIOS 2.2.x, when a fibre channel adapter is used, allows local users to gain privileges via unspecified vectors.

CVE-2015-5660
Published: 2015-10-15
Cross-site request forgery (CSRF) vulnerability in eXtplorer before 2.1.8 allows remote attackers to hijack the authentication of arbitrary users for requests that execute PHP code.

CVE-2015-6003
Published: 2015-10-15
Directory traversal vulnerability in QNAP QTS before 4.1.4 build 0910 and 4.2.x before 4.2.0 RC2 build 0910, when AFP is enabled, allows remote attackers to read or write to arbitrary files by leveraging access to an OS X (1) user or (2) guest account.

CVE-2015-6333
Published: 2015-10-15
Cisco Application Policy Infrastructure Controller (APIC) 1.1j allows local users to gain privileges via vectors involving addition of an SSH key, aka Bug ID CSCuw46076.

Dark Reading Radio
Archived Dark Reading Radio
Security researchers are finding that there's a growing market for the vulnerabilities they discover and persistent conundrum as to the right way to disclose them. Dark Reading editors will speak to experts -- Veracode CTO and co-founder Chris Wysopal and HackerOne co-founder and CTO Alex Rice -- about bug bounties and the expanding market for zero-day security vulnerabilities.