6 ways to add cybersecurity protections to outsourcing deals

As cybersecurity has become one of the most important strategic imperatives for the enterprise, concerns about how third-party IT services providers are protecting corporate data have grown. As a result, negotiation of cybersecurity and data privacy issues has become one of the most challenging areas in IT outsourcing contract negotiations, says Rebecca Eisner, partner in the Chicago office of law firm Mayer Brown.

“Suppliers are understandably concerned about not paying damages that are disproportionate to the revenue received, and therefore seek to limit or disclaim their liability,” says Eisner. “Customers are equally concerned, particularly where suppliers do not have the same incentives to protect customer data as the customer, and because the negative impacts of a security incident are generally far more significant to the customer than to the supplier.” What’s more, the cybersecurity regulatory environment is rapidly evolving, making it difficult for both sides to access the risks. 

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