What is a vendor risk assessment agreement?
It is a contract that sets out the security, compliance, and operational standards a vendor must meet, along with an Australian company's right to review and audit them.
Data, Privacy & Compliance
Vendor Risk Assessment Agreement
Generate a vendor risk assessment agreement setting security, compliance and audit requirements for third-party vendors, reflecting APRA's CPS 230 operational risk requirements and the Privacy Act 1988.
- Create a vendor risk assessment agreement for a software supplier
Create a vendor risk assessment agreement between [Company Name] and [Vendor Name], a software supplier, covering security standards, data handling under the Privacy Act 1988, and audit rights.
- Create a vendor risk agreement for a data-processing vendor
Create a vendor risk assessment agreement between [Company Name] and [Vendor Name] who processes personal information on the company's behalf, covering Privacy Act 1988 compliance and Notifiable Data Breaches obligations.
- Create a vendor risk agreement for a physical goods supplier
Create a vendor risk assessment agreement between [Company Name] and [Vendor Name], a physical goods supplier, covering quality standards, insurance, and compliance requirements.
Vendor Risk Assessment Agreement Generator (Australia)
A vendor risk assessment agreement sets out the security, compliance, and operational standards a vendor must meet, along with an Australian business's right to review and audit them. This free Australian generator produces versions for software suppliers, data-processing vendors, and physical goods suppliers, reflecting obligations under the Privacy Act 1988 and the Australian Privacy Principles for any vendor handling personal information, and the heightened requirements APRA-regulated entities face for managing material service provider risk under Prudential Standard CPS 230. It is designed for Australian businesses onboarding vendors, and particularly for financial services and other regulated entities that must be able to demonstrate oversight of third-party risk. The generator lets you set data security standards, breach notification timelines, audit rights, and remediation and termination triggers. Use it to document vendor oversight in a way that supports your own regulatory and privacy obligations.
Frequently asked questions
Why do I need this in addition to a normal vendor agreement?
A standard vendor agreement covers pricing and delivery. This document focuses specifically on risk, including security practices, privacy compliance, and what happens if the vendor has an incident.
What should it cover for a software or data vendor in Australia?
It should cover data security standards, obligations consistent with the Privacy Act 1988 and the Notifiable Data Breaches scheme, subcontractor disclosure, and audit or certification requirements.
Does APRA regulation affect vendor risk agreements?
Yes. APRA-regulated entities must manage the risk of material service providers under Prudential Standard CPS 230, which typically requires stronger contractual audit, monitoring, and exit-planning rights than a standard vendor contract.
What happens if a vendor fails a risk assessment?
The agreement should set out remediation steps, a cure period, and the company's right to terminate if risks are not addressed.
How often should vendor risk be reassessed in Australia?
Many companies require an annual review or reassessment whenever the vendor's services or data access change significantly, and APRA-regulated entities generally need more frequent monitoring for material service providers.