Incident Response Preparedness: Third-Party Vendor Management
Part 3
Overview | Detection Engineering | Technical IR Readiness | 3rd Party Vendor Management | 3rd Party Partners & Retainers | Managing Executives in a Crisis | Reporting Readiness | Final Thoughts
Third-party vendors are essential to nearly every business today. From IT providers to contract staffing firms, partners extend capabilities, reduce costs, and accelerate growth. But in the context of incident response, these same third parties represent both risk and complexity.
When an incident occurs, your ability to respond effectively depends not only on your own preparation but also on your vendors’. In our experience, there are three key areas every business must consider as part of third party incident response planning:
1. Know Your Vendors and Their Criticality
Incident response begins with visibility. Do you know who your third parties are? More importantly, do you know which ones are critical to business operations?
Consider this scenario: a staffing vendor hit by ransomware made up 30% of a client’s contract workforce. They connected directly to the internal network through VPN. When they were compromised, leadership asked: Should we shut down their access?
The answer carried weight: millions of dollars in project delays, idle contractors, and cascading impacts across development timelines. These are not “what ifs,” they are real, high-stakes business decisions.
Your incident response planning should account for:
Which vendors are critical to business continuity.
The operational impact if their access must be suspended.
Predefined decision-making criteria for balancing risk vs. business disruption.
Without this analysis, business leaders are forced into reactive, high-pressure decisions in the middle of an incident.
2. Customer Data Shared with Third Parties
Another scenario: a third party realizes they’ve been attacked and your customer data has been stolen.
Questions emerge quickly:
Was the data properly protected (e.g., encrypted at rest and in transit)?
What contractual liability do they have, and what liability falls back on you?
Are you prepared to meet reporting obligations to state Attorneys General or regulators?
How do you manage the public perception when the headlines simply say: “Your company’s customer data compromised”?
The reality: customers often understand breaches happen. What they remember is how you respond, with transparency, timeliness, and professionalism.
Practicing these scenarios, maintaining playbooks, and ensuring you have visibility into what data has been shared are essential for a confident, coordinated response.
3. Third Parties as Attack Pathways
Finally, consider the risk of a third party serving as the entry point to your network. This risk is not theoretical; it has been central to some of the largest breaches in recent years.
Managing this requires:
Staying abreast of vendor security posture throughout the relationship.
Setting clear expectations at contract time, not only around services delivered but also around incident response obligations and cybersecurity capabilities.
Ensuring vendors notify you quickly of compromises, and defining joint response expectations.
As JPMorgan Chase recently highlighted in their open letter to suppliers, large organizations now demand more from third parties because their clients demand it from them. In many cases, those reading this are the third-party suppliers that JPMC is talking to. SMBs should adopt this same mindset: your customers expect your vendors to uphold the same standards you claim to uphold.
Bringing It All Together
Third-party vendor management for incident response readiness isn’t about exhaustive audits or endless paperwork. Vendor questionnaires aren’t going to save you when there is an incident. It’s about:
Visibility into who your vendors are and how critical they are.
Preparedness for hard decisions about access and continuity.
Accountability for customer data entrusted to third parties.
Expectation-setting that your vendors play their role in your incident response program.
Customers today are realistic: breaches happen. What they care about is whether your organization is prepared to respond with professionalism and transparency. That response depends as much on your vendors as it does on your own team.
At Cipher North, we help organizations integrate third-party considerations into their incident response programs—turning potential weak points into prepared, resilient partnerships. Setup some time today to talk to us.