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Vendor Contracting for Privacy and Security
In an effort to continue to capture ongoing and new business, vendors may be opening themselves up to liability due to poorly drafted contracts with companies. In addition, in a rush by companies to have data shifted to the cloud, privacy concerns may be dangerously minimized.
It is difficult to deny that data security and privacy issues are now at the forefront of business concerns. Many businesses are now highly attuned to the risks of exposing their own or their clients' protected information due to well-publicized massive hacks of medical or consumer information over the past several years. These businesses are now taking very aggressive steps to limit the risk of hacks, malware, ransomware and other intrusions into their own systems.
An additional consideration is now in play; information that may reside with businesses' vendors or other service providers. Recent experience suggests companies are just as demanding (if not more so) when it comes to their vendors and vendor agreements. Indeed, many proposed vendor contracts seek the wholesale shift of risk from the data owner to the data vendor through hold-harmless and indemnity provisions. Experience also suggests there is little thought, however, being given to the effectiveness of the vendor's security systems, or the types of information to which the vendor may be privy.
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