Disclosures by business associate: Overview, definition, and example
What are disclosures by a business associate?
Disclosures by a business associate refer to the sharing of confidential, proprietary, or protected information by a company or individual working with another entity under a contractual relationship. These disclosures may be required by law, permitted under the contract, or restricted to protect sensitive data.
For example, in healthcare agreements governed by HIPAA, a business associate handling patient data must disclose certain information to regulatory authorities while ensuring compliance with privacy laws.
Why are disclosures by a business associate important?
This clause is important because it defines when, how, and to whom a business associate can disclose information. Without clear guidelines, unauthorized disclosures could lead to breaches of confidentiality, legal penalties, or loss of trust between parties.
For businesses, having a well-defined disclosures clause ensures compliance with data protection laws, maintains transparency, and prevents misuse of sensitive information. It also protects both parties by clarifying obligations and liabilities related to disclosures.
Understanding disclosures by a business associate through an example
A cloud storage provider acts as a business associate for a healthcare company, storing and managing patient records. Under their contract, the provider is allowed to disclose certain information to government regulators if required by law but cannot share data with third parties for marketing purposes. If the provider wrongfully discloses patient data to an unauthorized party, they could face legal consequences.
In another scenario, a financial consultant working as a business associate for a company is required to disclose financial reports to auditors but is restricted from sharing proprietary business strategies with external firms. The contract’s disclosure clause ensures that all disclosures align with regulatory and contractual requirements.
An example of a disclosures by business associate clause
Here’s how this type of clause might appear in a contract:
“The Business Associate shall not disclose any confidential or proprietary information obtained under this Agreement except as required by law or as expressly permitted by the Disclosing Party. Any disclosure required by law shall be made only after providing prior written notice to the Disclosing Party, unless prohibited by legal or regulatory authorities.”
Conclusion
A disclosures by business associate clause protects sensitive information while ensuring compliance with legal and contractual obligations. By clearly defining when and how disclosures can be made, businesses can safeguard confidentiality, avoid legal risks, and maintain trust in professional relationships.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.