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Crafting A Comprehensive TPRM Incident Response Plan For Your Business

By: SmallBizClub


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In today’s hyper connected business environment, companies are increasingly relying on third parties like vendors, contractors, and partners for critical business functions. While these relationships can provide enormous value, they also introduce significant cybersecurity risks if not managed properly. By the end of this year, the cost of cyber attacks on the global economy is estimated to top $10.5 trillion. Recent high-profile breaches have shown that threat actors are actively targeting third party networks as a means to infiltrate their customers. That’s why having a well-developed third party risk management program is no longer optional for organizations; you need an incident response plan.

Developing a TPRM Incident Response Plan

A key component of having a TPRM program is an incident response plan that is tailored to the unique challenges of a third party cyber event. In this post, we will provide tips on how to craft a comprehensive third party incident response plan.


Understand Your Third Party Ecosystem 

The first step is gaining visibility and conducting due diligence into your third party relationships. Use questionnaires and audits to catalog all vendors, contractors, and partners who have access to your data, networks, and systems. Identify the type of access each third party has along with the sensitivity of the data they handle. This enables you to focus response efforts on critical third parties that represent the biggest potential risk. 

Classify Incident Severity 

Once you have visibility into your third party ecosystem, establish clear policies for incident classification. Make sure definitions align with internal severity levels. For example, a data breach involving sensitive customer information should be classified as a high severity incident. Low severity incidents may involve smaller policy violations or service disruptions. Matching classifications will enable smoother coordination between internal and third party response teams.

Define Communication and Escalation Processes

The lack of established communication channels and reporting responsibilities is a common pitfall in managing third party risk and third party incident response. Therefore, outlines of communication plans need to be established in advance as part of the broader response plan. Easy to reference contact sheets should be created that include phone numbers and emails for key third party employees. Owners need to be defined for contacting third party IT security, legal counsel, and executive leadership. Escalation policies should route notifications to these personnel based on severity level. 

Coordinate Incident Investigation Processes  

Investigating the root cause of a third party cyber incident requires cooperation between internal security teams and external providers. However, roadblocks often arise around data sharing and system access. To facilitate joint investigations, legal agreements like NDAs and Letters of Authorization should be executed in advance so that investigative activities can commence immediately without being stalled by bureaucratic obstacles. Access credentials may also need to be granted to third party systems temporarily until the investigation is complete.

Integrate and Align Response Plans  

To enable coordination during an actual response, integrate relevant parts of the third party incident response plan directly into internal documentation. This creates unified and consistent guidance that personnel from different companies can follow without confusion. It also ensures that the steps and notifications align properly between the plans throughout the incident lifecycle. Keep both plans updated as technology infrastructure and contractual agreements evolve.

Conduct Communication Exercises

To avoid unexpected complexities during an actual incident, conduct tabletop exercises that test communication channels and procedures between teams. Use exercise scenarios based on real third party cyber risks identified during the risk assessment process. Not only does this validate that contact lists are accurate, but also affords an opportunity for all parties to clarify expectations and responsibilities. Conduct exercises annually at a minimum, or whenever a major change to technology environments or contracts occurs.

Secure Executive Commitment

Gaining upfront executive buy-in across the organizations involved is key to developing an effective third party incident response plan. Business leaders from your company and third parties need to devote resources to support ongoing plan maintenance, training, and exercises. Establish steering committees with executives responsible for driving participation. Getting joint commitment in advance will ensure all parties are actively engaged when an incident occurs.

Define Roles and Responsibilities

A successful third party incident response is dependent on all teams involved understanding their unique roles and responsibilities. Clearly delineate which tasks will be handled internally vs. externally during key stages of the response. Internally, identify owners from IT, security, legal, communications, and other business units. Externally, ensure third party contacts are defined for their equivalent teams. Map out an RACI (Responsible, Accountable, Consulted, Informed) matrix to eliminate confusion during a stressful incident scenario.

Learn From Past Incidents

After a third party cyber incident has been resolved, be sure to conduct a retrospective with all parties involved in the response. Identify areas of success to repeat in the future, as well as breakdowns that need improvement. Update response procedures to include lessons learned. Being proactive about continuous enhancement will lead to faster and more effective response capabilities over time.


Cybersecurity, especially in small businesses is often overlooked. Third party cyber incidents are growing in frequency and severity each year. By being proactive and crafting comprehensive incident response plans, organizations can react more quickly, minimize damages, and coordinate actions more effectively when a third party breach inevitably occurs. Irrespective of the fact whether an organization is big or small, following the tips outlined in this post will help you create and continuously improve your third party incident response plan over time. Partner openly with critical suppliers to implement robust response protocols that benefit all parties involved.

Author: Nagaraj Kuppuswamy is the Co-founder and CEO of Beaconer, an esteemed enterprise specializing in managed third-party risk using the cloud-native AI-based solution. With an extensive portfolio of accolades and industry certifications, Nagaraj stands out as a seasoned expert, boasting over 16 years of dedicated involvement in the field of Cybersecurity. Throughout their career, he has predominantly focused on elevating the realm of third-party risk assessment. You can connect with him through Linkedin.


Published: January 17, 2024

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