What is a Bug Bounty Program, and Does My Organization Need One?

Today’s complex digital environments are constantly evolving, and one misstep can cause a serious security vulnerability. Since the mid-90s, large organizations have integrated bug bounty programs as an additional strategy to improve their vulnerability management efforts. However, in the past two years, our vCISOs have seen a marked increase in the number of SMBs without bug bounty programs that receive unsolicited emails from bug bounty hunters requesting payments. So, it’s time to dive into the question: what is a bug bounty program, and does your organization need one? We’ll share the intricacies of bug bounty programs, explore their benefits and potential risks, and offer implementation advice.

What is a Bug Bounty Program?

A bug bounty program is a reward offered by some organizations and software developers that invites people to search out vulnerabilities in exchange for payment or recognition. These programs are designed to incentivize ethical hackers to find and report security flaws so they can be fixed before malicious actors exploit them. Bug bounty programs range in size and payouts, from very unstructured programs that only offer bragging rights to highly structured programs with hefty monetary rewards up to $100,000. Bug bounty programs can be public, private, or semi-private, and these programs can be managed internally or through a third-party managed bug bounty platform. Now that we’ve tackled the question of ‘what is a bug bounty program,’ let’s look at whether your organization needs one.

Bug Bounty Hunters Widen Their Targets

The adoption of bug bounty programs has surged in recent years. High-profile companies like Google, Facebook, and Microsoft are great examples that demonstrate the effectiveness of using these programs to identify and mitigate vulnerabilities. This trend has now extended beyond tech giants, with organizations across various industries recognizing the value of bug bounty programs as an additional source of ongoing security testing.

However, we’re also seeing a rise in scam attacks. “Organizations without bug programs are being targeted because many unethical hackers are counting on their real or wildly exaggerated claims to inspire fear, chaos, and a nice payday,” stated Ben Kast, principal consultant and a vCISO at LMG Security.  “For organizations without a defined policy, differentiating between legitimate and scam reports can be challenging, especially for non-cybersecurity practitioners.”

Why Your Organization Might Need a Bug Bounty Program

Dealing with bounty requests can be time-consuming and stressful, raising concerns about the consequences of ignoring a legitimate threat. This uncertainty creates fear and insecurity, as your organization may worry about potential exploitation or public disclosure if you don’t respond appropriately. “If you don’t have an in-house process and the skilled staff to assess submitted vulnerabilities, grading the severity becomes difficult,” Ben shared. “The fear of potentially compromising systems can cause some organizations to pay these hackers without vetting the information.” Let’s look at the pros and cons of bug bounty programs so you can decide what is best for your organization.

Pros

1. Stronger proactive security. As we discussed in the section, “What is a Bug Bounty Program,” bug bounty programs are another proactive security tool to uncover vulnerabilities. While regular security testing (pentesting and web app pentesting especially) is still crucial and provides a baseline to assess whether you are already aware of a vulnerability and its level of criticality, your environment is likely complex. With numerous cloud instances, connected vendors, web applications, and frequent changes, even a minor configuration error can lead to exposure. Bug bounty programs can potentially find these errors between your penetration tests, cloud configuration reviews, red team tests, etc., and are much less expensive than a data breach.
2. Access to a global talent pool. By launching a bug bounty program, you can tap into a global network of security researchers. This diverse pool of talent brings varied perspectives and expertise, often uncovering vulnerabilities that in-house teams and automated scanners miss.
3. Reduced scammers and extortionists. Organizations with a clear bug bounty policy and vetting process are less vulnerable to security vulnerability extortion attempts. A structured program helps you assess your risks, communicate clearly with bug bounty hunters, and avoid paying for known, low-level issues that may be exaggerated by scammers. For instance, email configuration issues like DMARC might be misunderstood, causing unnecessary panic.
4. Enhanced reputation and trust. Organizations that run bug bounty programs demonstrate a commitment to security. This transparency can enhance your organization’s reputation, building trust with customers, partners, and stakeholders.

Cons

1. Time and effort. Depending on the size of your organization and the complexity of your program, defining, implementing, and managing a bug bounty program can take significant effort and hours.
2. Managing false positives. Not all reported vulnerabilities are valid or critical. Managing false positives can be time-consuming and resource-intensive. A structured process for evaluating and triaging these reports is essential.
3. Legal and ethical concerns. Engaging with independent researchers involves legal and ethical considerations. Companies must navigate the complexities of defining the scope of permissible activities and ensuring compliance with applicable laws and regulations.
4. Potentially attracting malicious hackers. Bug bounty programs may attract black-hat hackers as well as ethical hackers. This necessitates a robust framework for handling submissions and a process for ensuring hackers are not on a banned list.

It’s important for you to consider the pros and cons and decide the best path forward for your organization.  Our advice is that it’s

A Word About Responsible Disclosure Standards

Ethical hackers, researchers, and penetration testing organizations (of which we are one), generally follow a responsible vulnerability disclosure process. The industry standard is to provide a 90-day notification window to the impacted organization before publicly reporting the vulnerability. Why? This 90-day window enables the organization to patch the vulnerability or define mitigation steps before it is publicly announced (and often a CVE is listed).

You may be wondering why these vulnerabilities are publicly announced if the goal is to give the organization time to fix these issues. Unfortunately, many organizations DON’T fix the security gaps in a timely manner. Releasing these issues is one way the cybersecurity community holds each other accountable and increases the pressure on organizations to quickly fix security vulnerabilities. Our team strongly suggests that you always continue to communicate with ethical hackers, research organizations, and penetration testing groups to let them know the timeline and status of the vulnerability fix. Not communicating this information implies that you have not fixed the issue. It will be much less embarrassing if you have a patch or mitigation steps available when the vulnerability is released.

LMG Security’s Recommendations for Implementing a Bug Bounty Program

There is an increasing number of organizations facing bug bounty requests. If you’re considering adding a program, we suggest you start by assessing how much time and money you can commit to the program. “At a minimum, you need a stated policy and an internal process to handle bug bounty requests,” stated Delaney Moore, senior security consultant and a vCISO at LMG Security. “Whether or not you decide to have a bug bounty program, having a clear plan and process for responding to bug reports can reduce the risk of being cornered by scammers or missing a potentially serious security vulnerability.”

Minimum Steps All Organizations Should Take

1. Develop an internal policy. Even if your organization does not plan to implement a formal bug bounty program, establish an internal policy for handling vulnerability disclosures. This policy should guide how to respond to both legitimate reports and scam attempts. A skilled cybersecurity leader or vCISO can be very helpful in this process.
2. Publicly communicate your stance. Publish a public statement on your website outlining your stance on bug bounties and vulnerability reporting. This transparency can help manage expectations and reduce the impact of PR issues.
3. Have regular security assessments. Conduct regular penetration testing and vulnerability scans. These proactive measures can reduce the risk of unaddressed vulnerabilities and improve your ability to handle reported issues.
4. Training and awareness. Educate your team about the risks associated with bug bounty reports, including how to differentiate between legitimate and scam submissions. This will help you respond effectively.

Implementing a Bug Bounty Program

If you’re ready to implement a bug bounty program, consider these steps:

1. Clearly define your polices and program.  Establish a well-defined policy outlining the scope of the program, including which applications and vulnerabilities are in scope and what is out of scope. This policy should also specify the channels for reporting vulnerabilities and the criteria for rewarding submissions.  If you’re looking for an example of a mature bug bounty program, take a peek at Google’s program.
2. Create a response process: Develop a systematic process for managing bug reports. This includes intake, triage, and response procedures, as well as defined roles and responsibilities. Ensure that a team, rather than a single individual, handles these tasks to mitigate risks of reports going unnoticed or improper responses, and to improve response efficiency.
3. Create a vulnerability tracking mechanism/registry and severity standards. Having a vulnerability tracking system will streamline your response and provide a reference tool for what is already known or in the remediation process. This will help you quickly categorize reports and decide how quickly to move them through your process.
4. Consider a bug bounty platform. Consider using bug bounty platforms such as HackerOne or Bugcrowd. These platforms provide infrastructure, community access, and management tools that can streamline the process of running a bug bounty program.
5. Establish a reward structure. Most organizations use a tiered reward structure based on the severity of vulnerabilities. Transparent and fair compensation can attract high-quality submissions and foster a positive relationship with security researchers. If you’re wondering how much to pay, one bug bounty platform found that the average bug bounty is around $1,000, while the average for high or critical-severity bug bounties is $3,700.
6. Consider legal and ethical issues. Work with legal and compliance teams to define the legal boundaries of your program. You will want to define:
   1. Who is eligible? Age limits, exclusions for people on a government sanction list, etc.
   2. What activities are permitted? What actions will your organization take if researchers cross these boundaries?
   3. Should you require a non-disclosure agreement (NDA), or will that reduce your audience of ethical hackers and research organizations?
7. Publish program guidelines. Publish a public statement and external-facing bug bounty guidelines on your website outlining your stance on bug bounties and vulnerability reporting. This transparency can help manage expectations, deter unethical hackers, and reduce the impact of PR issues.

A bug bounty program can be a valuable component of your organization’s security strategy. By incentivizing ethical hackers to report vulnerabilities, you can proactively address security flaws and enhance your overall security posture. However, implementing such a program requires careful planning, clear policies, and robust processes to manage the associated risks and ensure effective response. Whether you choose to launch a formal bug bounty program or simply establish a policy for handling vulnerability reports, taking a proactive approach to security is essential.

We hope we have answered your question about “what is a bug bounty program, and does my organization need one?” Please contact us if you need support with policy development, technical testing, cybersecurity solutions, or training.