Is there a procedure for handling security incidents?

Incident handling is one of the ten mandatory measures

Yes, and that question specifically tests the second of the ten measures under Article 21(2) NIS2: "incident handling" is listed explicitly alongside risk analysis as its own category. Anyone receiving this question must not only state that a procedure exists, but also demonstrate what it contains: how an incident is reported, who takes it on, what steps are taken and how what happened is documented. A procedure without an owner or without documented steps will not convince an auditor, even if the document exists.

Concrete evidence is usually a procedure description or runbook, containing incident classification (severity, impact), a reporting point or contact person, and a step for evaluation after completion. That evaluation is not decorative: without a fixed way to record and retain events in the systems, there is no basis to reconstruct an incident or prove that it has been handled. If the procedure is still missing, then "no, in development" is a more honest answer than inventing a procedure that does not exist — the questionnaire asks what is there, not an intention.

How this relates to continuity and risk analysis

Article 21(2) lists the ten measures as a whole, and incident handling does not stand apart from the rest. An incident affecting service delivery often triggers the point about back-ups and emergency provision to restore service delivery; an incident procedure that does not refer to the recovery plan is incomplete. Incident handling is also the final link in policy for risk analysis and the security of information systems: risk analysis predicts what can go wrong, incident handling manages what happens if it does go wrong. A customer asking about the procedure is thus implicitly checking whether those two align.