Incident response and continuity

The incident response and continuity requirement means you must be able to detect, contain, and recover from cyber incidents without losing control of critical operations. Operationalize it by maintaining written incident response (IR) and continuity plans, assigning roles, integrating third parties, and running documented exercises that prove you can execute and recover ¹.

Key takeaways:

• You need both response (IR) and recovery (continuity) capabilities that work under real conditions, not just policies ¹.
• The fastest path to audit-ready compliance is a tested plan with scoped scenarios, clear ownership, and retained exercise evidence ¹.
• Third-party dependencies must be built into playbooks, comms trees, and recovery steps, or your “capability” will fail in practice.

Compliance teams usually inherit “incident response” as a security function and “continuity” as a business function, then find out during an audit that neither is wired together. C2M2’s incident response and continuity requirement is simple on paper: maintain the capability to respond and recover from cyber incidents ¹. The operational challenge is proving capability with repeatable execution, defined decision rights, and evidence that the organization can operate through disruption.

For a CCO or GRC lead, the goal is not to author a perfect playbook. The goal is to establish a minimum viable, testable operating model: defined roles, escalation paths, technical and business recovery priorities, third-party touchpoints, and an exercise cadence that produces artifacts you can hand to an assessor. If you can show that incidents trigger a predictable workflow, that critical services have recovery steps, and that exercises lead to tracked improvements, you will meet the intent of the incident response and continuity requirement ¹.

This page is requirement-level guidance you can execute quickly, with step-by-step actions and audit-ready evidence targets.

Regulatory text

Excerpt (C2M2): “Maintain capability to respond and recover from cyber incidents.” ¹

What the operator must do

You must be able to (1) respond to a cyber incident (coordinate people, process, and technology to contain and eradicate) and (2) recover operations (restore services, data, and required business functions) ¹. “Maintain capability” implies:

• The capability is defined (plans and procedures exist).
• The capability is owned (roles and decision rights are assigned).
• The capability is current (kept aligned to systems, third parties, and business priorities).
• The capability is proven (tested with documented outcomes) ¹.

A practical compliance interpretation: if you cannot show documented tests and outcomes, you will struggle to prove “capability,” even if talented responders exist.

Plain-English interpretation of the incident response and continuity requirement

Your organization needs a muscle memory for cyber disruption:

• Incident response: “We know how to recognize an incident, declare it, coordinate the response, communicate, and contain it.”
• Continuity / recovery: “We can restore or operate through loss of systems, identities, networks, OT/ICS components (if relevant), or third-party services.”

The requirement is satisfied when incident handling and continuity are not separate binders. They must connect through shared triggers, priorities, and handoffs:

• IR declares an incident and stabilizes the situation.
• Continuity restores minimum viable operations and full service levels.
• Post-incident review drives fixes and updates to plans.

Who it applies to (entity and operational context)

C2M2 is commonly used by energy sector organizations and critical infrastructure operators ¹. In practice, you should scope applicability across:

• Corporate IT (identity, email, ERP, finance systems)
• Operations environments (OT/ICS, field devices, control systems) where applicable
• Shared services and managed service providers
• Cloud/SaaS providers that host critical business processes
• High-impact third parties (call centers, billing, dispatch, engineering, maintenance platforms)

If your organization relies on a third party to run a critical function, your continuity capability depends on that third party’s recovery posture and your contractual/operational ability to coordinate restoration.

What you actually need to do (step-by-step)

Below is an execution sequence that builds “capability” in the order assessors typically probe: governance → plans → integration → testing → evidence.

1) Set governance: name owners and decision rights

Create clear accountability for:

• IR owner (usually Security/IR lead)
• Continuity owner (BCP/DR lead)
• Executive incident authority (who can declare a major incident, approve customer/regulator communications, and approve emergency changes)
• Legal/Privacy escalation path (for breach assessment)
• Third-party coordinator (procurement/vendor management + security)

Define decision points that routinely derail response:

• Who declares an incident and at what severity?
• Who can take disruptive containment actions (disable accounts, block traffic, isolate segments, fail over systems)?
• Who approves external communications?

Artifact target: an incident governance/RACI and escalation matrix that maps names/roles to actions.

2) Define your “crown jewels” and recovery priorities

Continuity planning fails when everything is “critical.” Create a short list of:

• Critical services (e.g., dispatch, billing, customer portal, plant operations systems)
• Supporting systems (identity provider, network, DNS, ticketing, SIEM, backups)
• Data sets that must be restored to resume operations

Tie priorities to a simple service inventory: service name, owner, dependencies, and primary third parties.

Artifact target: a critical services register with dependencies and owners.

3) Build an incident response plan that connects to continuity

Your IR plan must include:

• Detection and triage workflow (what triggers IR activation)
• Severity classification (how you scale response)
• Containment/eradication steps (technical response paths)
• Communications plan (internal, external, third parties)
• Evidence handling and logging (so actions are auditable)
• Handoff to recovery/continuity (who leads restoration once containment is stable)

Keep the plan operational: responders need checklists, not theory.

Artifact target: IR plan + playbooks for common scenarios relevant to your environment.

4) Build continuity and recovery runbooks for critical services

For each critical service, document:

• Minimum operating mode (what “acceptable degraded” looks like)
• Restore steps (technical recovery actions, prerequisites, credentials, break-glass access)
• Dependency failures (what if identity is down, what if a SaaS provider is down, what if a third party is breached)
• Contacts and escalation (including third-party support paths)

If you already have DR runbooks, align them to cyber scenarios (malware, ransomware, identity compromise), not just “data center outage.”

Artifact target: service-level recovery runbooks and an overall continuity plan that references them.

5) Integrate third parties into response and recovery

Document and implement:

• Third-party notification paths (who contacts the provider, how, and under what conditions)
• Contractual hooks (SLAs, incident notification, cooperation duties)
• Evidence expectations (what you expect from the third party during an incident)
• Access controls for emergency actions (how you revoke third-party access quickly)

Artifact target: third-party incident contact list + contract clause checklist + a playbook step that includes the third party.

6) Run exercises and retain documented outcomes (the fastest audit win)

C2M2 guidance emphasizes testing with documented outcomes as strong implementation evidence ¹. Execute exercises that prove:

• You can declare and manage an incident
• You can coordinate across teams
• You can restore at least one critical service with a real runbook
• You capture gaps and track remediation to closure

Exercise formats:

• Tabletop (decision and communication focus)
• Technical simulation (containment and recovery steps)
• Hybrid (best for proving end-to-end capability)

Artifact target: exercise plan, participant list, scenario, timeline, after-action report, remediation tracker, and evidence of plan updates.

7) Create an evidence binder for exams and internal audit

Most “we have a plan” programs fail because evidence is scattered. Centralize:

• Latest plans and runbooks
• Training/briefing records for responders
• Exercise artifacts and lessons learned
• Incident logs and post-incident reviews (sanitized if needed)
• Change records showing updates to plans after exercises/incidents

Where Daydream fits naturally: Use Daydream as the system of record to map the incident response and continuity requirement to owners, tasks, evidence, and test outcomes so you can answer audits with a single, consistent trail instead of chasing files across teams.

Required evidence and artifacts to retain

Minimum set that usually satisfies “capability” questions:

• Incident Response Plan (approved, versioned)
• Continuity/BCP and Disaster Recovery documentation (approved, versioned)
• Critical services register with dependencies (including third parties)
• On-call roster and escalation matrix (current)
• Incident communication templates (internal/external)
• Exercise materials and documented outcomes ¹
• After-action reports and remediation tracking (with closure evidence)
• Records showing plan updates after tests/incidents

Common exam/audit questions and hangups

Assessors and auditors tend to probe the same failure modes:

• “Show me the last test.” If you cannot produce the exercise report and outcomes, “capability” is unproven ¹.
• “Who has authority to declare a major incident?” Vague answers indicate weak governance.
• “What happens if identity is compromised?” Many recovery plans assume identity works.
• “Which third parties are required to recover critical services?” If you can’t name them, continuity is fragile.
• “What changed after the last incident/exercise?” No improvement loop suggests the program is static.

Frequent implementation mistakes and how to avoid them

1. IR plan and continuity plan don’t meet.
   Fix: add explicit handoffs, shared severity triggers, and a unified incident timeline log.

2. Runbooks exist but aren’t executable.
   Fix: require each critical service runbook to include prerequisites (accounts, tools, access paths) and validate during exercises.

3. Third parties are treated as “outside scope.”
   Fix: list third-party dependencies per service, maintain incident contacts, and test coordination paths during exercises.

4. No evidence discipline.
   Fix: define an evidence checklist per exercise and store it in a single repository with version control.

5. Plans are written for audits, not operators.
   Fix: add checklists, decision trees, and short call scripts. Keep long background in appendices.

Enforcement context and risk implications

No public enforcement cases were provided in the source catalog for this requirement. Practically, weak incident response and continuity increases the chance that a cyber incident becomes a prolonged outage, triggers contractual breaches, or causes safety/operational impacts in critical infrastructure settings. Your compliance risk is compounded by the evidence gap: if you cannot show tested outcomes, you will struggle to demonstrate capability even if teams perform well under pressure ¹.

A practical 30/60/90-day execution plan

Days 0–30: Establish minimum viable governance and scope

• Name IR and continuity owners; publish escalation matrix.
• Build the critical services register and identify top third-party dependencies.
• Collect existing IR/BCP/DR documents; gap-assess against current environment.

Deliverables: governance/RACI, critical services register, draft integrated incident lifecycle flow.

Days 31–60: Write executable playbooks and recovery runbooks

• Update IR plan with severity model, comms, and continuity handoff.
• Create or refresh recovery runbooks for the highest-impact services first.
• Define third-party incident coordination steps and contact paths.

Deliverables: IR plan v1, continuity plan v1, service runbooks for priority services, third-party contact list.

Days 61–90: Prove capability with tests and documented outcomes

• Run a tabletop exercise that forces cross-functional decisions and third-party coordination.
• Run at least one technical recovery exercise using a real runbook for a critical service.
• Write after-action reports; open remediation tickets; update plans based on lessons learned ¹.

Deliverables: exercise artifacts, after-action reports, remediation tracker with owners and due dates, updated plans.

Frequently Asked Questions

Do I need separate documents for incident response and continuity?

You can keep separate documents, but you must connect them operationally through triggers, handoffs, and shared priorities so response leads to recovery ¹. Auditors will look for an end-to-end workflow and evidence it works.

What’s the minimum evidence to prove “capability”?

A current IR plan, continuity/recovery runbooks for critical services, and documented test outcomes are the core proof points ¹. Add after-action reports and a remediation tracker to show continuous improvement.

How do I handle third parties in the incident response and continuity requirement?

Treat third parties as dependencies that can fail during an incident. Maintain incident contacts, define notification and cooperation steps in playbooks, and test at least one scenario that requires third-party coordination.

What if we haven’t done an exercise yet?

Schedule a tabletop quickly, then a targeted technical recovery exercise tied to one critical service runbook. Keep the scope small, but document outcomes and track remediation to closure ¹.

Who should approve the incident response plan and continuity plan?

Assign approval to the accountable executives for cyber response and operational resilience in your governance model. The key is provable ownership and decision rights that match how your organization actually runs incidents.

How should I store artifacts so audits don’t turn into a scavenger hunt?

Keep a single evidence location with versioned plans, exercise reports, and remediation tracking. Many teams use Daydream to map the incident response and continuity requirement to tasks and retain artifacts with owner and date metadata.

Related compliance topics

• 2025 SEC Marketing Rule Examination Focus Areas
• Access and identity controls
• Access Control (AC)
• Access control and identity discipline
• Access control management

Footnotes

1. DOE C2M2