With the advent of the GDPR, they are becoming even more so as customers insist upon unlimited liability for data protection breaches - largely out of fear that a breach by their processors could expose them to 4% fines from DPAs. 11. Indemnification Provision . But many data breaches, such as Target’s 2013 breach that exposed the financial data of 40 million customers, have resulted from poor cybersecurity on the part of a vendor. The parties shall coordinate and cooperate in good faith on developing the content of any related public statements or any required notices. Customers must recognize that every data breach may expose the organization to significant costs while allowing the responsible vendor to walk away for a nominal amount. Names, addresses, and financial data were reportedly compromised due to lax security practices. Liability discussions in contractual negotiations are always challenging. Data security measures coupled with risk transfer in the form of insurance coverage and indemnification can further a policyholder’s risk management strategies and serve to defray the financial burden if sensitive data gets hacked. Sysnet.air is an award-winning, cyber security and compliance management solution that helps businesses to improve security, and acquiring organisations to Note that, even if the triggering event is negligence, and no breach of contract has occurred, this language would still arguably hold Party A 100% liable when it is 60% at fault, unless there is a reciprocal provision under which Party A can make an indemnification claim against Party B. A lot of negotiations center around indemnification, especially as the penalties, costs, and other risks surrounding data protection continue to balloon. Does the agreement require the vendor to indemnify you if it suffers a data breach… Data Breach Indemnity Protection can be delivered as a stand-alone service or as part of our Sysnet.air solution. Indemnification . Generally, data privacy laws across the United States, both state and federal, do not impose strict civil liability on entities that experience a breach of security resulting in the disclosure of personal information to unauthorized or unknown parties. 12. Does the contract contain representations and warranties regarding the vendor’s legal compliance standards and obligations, and ongoing obligations of the vendor to comply with all laws relating to data privacy and security? INDEMNIFICATION AND DATA SECURITY PROVISIONS . GovPayNow payment portal may have exposed over 14 million customer records. 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