The cyber incident that affected the operations of companies worldwide last week, the complete dependence of companies on outsourced operational and storage systems became even more evident, making it essential to use of contractual mechanisms to manage and reduce the risks of possible service failure.
Even though it is not possible to absolutely prevent and anticipate all possible system failures, it is essential to formalize contracts with companies that provide technology services – such as software licensing and data storage and processing, for example – providing clauses that mitigate the impacts suffered by the contracting company if any type of inconsistency occurs in the contracted system.
We highlight 4 points of attention for these contracts:
1. specification of contracted services and, mainly, Service Levels (SLA);
2. the provider’s obligations to have data backup, security connectivity, carry out tests before implementing updates and have robust security against cyber attacks, which must be constantly updated;
3. detailing, in contract, disaster recovery procedures and service continuity plans, in order to reduce the impact of failure to provide services; and
4. definition of a penalty when there is a breach of contract, especially failure to meet the SLA, and compensation in the event of damages suffered resulting from failure, whether in the provision of services, as well as in the disaster recovery plan and continuity of services.
In a digital and interconnected world, the ability to adequately manage possible damage caused by technological failures becomes an essential component for business continuity and the sustainability of business operations.
Effective contractual protection not only helps mitigate risks and minimize adverse impacts, but also promotes a relationship of trust and collaboration between the parties involved, with compensation for damages when necessary.
