VRM Breach-Proof Scorecard

Assess: information security policies and procedures, access control mechanisms, data encryption practices, network security architecture, vulnerability and patch management, employee security training, incident response capabilities, business continuity and disaster recovery, compliance certifications (SOC 2, ISO 27001), insurance coverage, subcontractor management, and data handling practices. Risk level determines assessment depth—critical vendors require comprehensive evaluation.

Tier 1 (Critical): Access to sensitive data or critical systems—require comprehensive assessment, annual reviews, continuous monitoring. Tier 2 (High): Moderate data access—detailed assessment, biannual reviews. Tier 3 (Medium): Limited access—standard questionnaire, annual reviews. Tier 4 (Low): No data access—basic screening. Tiering focuses resources on highest-risk relationships.

Key certifications include SOC 2 Type II (security controls audit), ISO 27001 (information security management), PCI-DSS (payment card data), HIPAA compliance (healthcare data), FedRAMP (government cloud), and industry-specific standards. Certifications provide third-party validation of controls but don't eliminate risk—review actual reports and test results. Certifications should be current (within 12 months).

Develop standardized questionnaire templates (SIG, CAIQ, or custom) appropriate for each risk tier. Automate distribution and collection. Validate responses through evidence review (policies, scan reports, certifications). Use scoring rubrics for objective evaluation. Share questionnaires across departments to reduce vendor burden. Update questionnaires annually based on threat landscape. Consider third-party risk rating services for supplemental intelligence.

Contracts should mandate: immediate notification (within 24-48 hours) of security incidents affecting your data, detailed incident reports including scope and root cause, remediation plans and timelines, and cooperation with your incident response. Specify your right to audit post-breach. GDPR requires processor breach notification within 72 hours. Test notification procedures during onboarding.

Continuous monitoring for critical (Tier 1) vendors using security ratings services. Annual comprehensive reassessment for all tiers, with quarterly reviews for Tier 1-2. Immediate reassessment after vendor security incidents, significant service changes, mergers/acquisitions, or compliance audit failures. Automated security posture monitoring detects real-time risk changes. Regular assessment maintains security as vendor environments evolve.

Include: security control requirements matching your standards, right to audit security controls, breach notification obligations, data encryption requirements (in transit and at rest), data retention and deletion procedures, subcontractor security requirements, liability and indemnification for breaches, insurance requirements ($1M+ cyber liability), compliance with applicable regulations, and termination rights for security failures. Legal review essential.