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Privacy Security Agreement

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PRIVACY SECURITY AGREEMENT

This Privacy Security Agreement (the Agreement) is entered into as of Effective Date: by and between Company Name: with principal place of business at Address: ("Company"), and Service Provider Name: with principal place of business at Address: ("Provider"). Company and Provider are sometimes referred to herein individually as a Party and collectively as the Parties.

RECITALS

WHEREAS, the Parties anticipate that Provider will receive, store, process or otherwise handle Personal Data (as defined below) in connection with Provider's provision of services described as: ; and

WHEREAS, the Parties desire to establish binding obligations with respect to the processing, confidentiality, integrity and security of Personal Data and to allocate responsibilities for data incidents, audits, and compliance with applicable privacy and data protection law.

NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

1. DEFINITIONS

1.1 "Personal Data" means any information, whether electronic or physical, that relates to an identified or identifiable natural person and that is provided to, collected by, or processed by Provider on behalf of Company in connection with the Services.

1.2 "Confidential Information" means non-public information disclosed by one Party to the other that is marked as confidential or would reasonably be regarded as confidential, including Personal Data, security measures, business processes and financial information.

2. SCOPE AND PURPOSE

2.1 The Parties acknowledge that Provider will process Personal Data solely for the purpose of performing the Services described in this Agreement and only on documented instructions from Company unless otherwise required by applicable law.

2.2 The categories of Personal Data and classes of data subjects to be processed are described as:

3. DATA SECURITY OBLIGATIONS

3.1 Provider shall implement and maintain technical and organizational measures appropriate to the risk, including administrative, physical and technical safeguards designed to protect the confidentiality, integrity and availability of Personal Data. Minimum measures shall include access controls, encryption in transit and at rest where feasible, patch management, secure development practices, and periodic security testing.

3.2 Provider shall ensure that personnel who have access to Personal Data are subject to confidentiality obligations and are trained with respect to their data protection responsibilities.

4. PRIVACY COMPLIANCE

4.1 Provider represents and warrants that it shall comply with applicable data protection and privacy laws in performing its obligations under this Agreement and shall not process Personal Data in a manner that would cause Company to be in breach of such laws.

4.2 Provider shall provide reasonable cooperation to enable Company to fulfill its obligations to respond to data subject requests, including requests for access, correction, portability, objection, restriction of processing or deletion of Personal Data.

5. BREACH NOTIFICATION AND INCIDENT RESPONSE

5.1 Provider shall notify Company without undue delay, and in any event within days after becoming aware of a security incident that results in unauthorized access, use or disclosure of Personal Data (a Security Incident). The notice shall describe the nature of the incident, the categories of affected data, likely consequences, and mitigation measures taken.

5.2 Provider shall cooperate with Company in investigating the incident, provide remediation support, and implement corrective actions to prevent recurrence.

6. AUDITS AND RECORDS

6.1 Upon reasonable prior notice, Provider shall permit Company, or an independent auditor selected by Company, to conduct audits or inspections to verify Provider's compliance with this Agreement. Audits shall be conducted during normal business hours and in a manner that minimizes disruption to Provider's operations.

6.2 Provider shall maintain accurate records of processing activities involving Personal Data and shall provide such records to Company upon reasonable request.

7. SUBPROCESSORS

7.1 Provider shall not engage any subprocessor to process Personal Data without providing prior written notice to Company. Where Provider engages subprocessors, it shall impose contractual obligations on subprocessors that afford at least the same level of protection as set forth in this Agreement.

8. TERM AND TERMINATION

8.1 This Agreement shall commence on the Effective Date and shall continue for the term of the underlying Services; provided that either Party may terminate for material breach that is not cured within thirty (30) days of written notice.

8.2 Upon expiration or termination, Provider shall, at Company's election, return all Personal Data to Company and securely delete or destroy residual copies in accordance with documented procedures within days, unless retention is required by applicable law, in which case Provider shall isolate and protect such retained data.

9. LIABILITY; LIMITATION OF LIABILITY

9.1 Each Party's liability for direct damages arising out of a breach of this Agreement shall not exceed USD, except for liability resulting from willful misconduct, gross negligence, or breaches of confidentiality or infringement of data subject rights, for which no cap shall apply.

9.2 Neither Party shall be liable for indirect, incidental, special or consequential damages, including lost profits, except to the extent liability may not be limited by applicable law.

10. INDEMNIFICATION

10.1 Provider shall indemnify, defend and hold harmless Company and its officers, directors and employees from and against any third-party claims, liabilities, losses and expenses arising from Provider's breach of this Agreement, negligence, or failure to comply with applicable data protection law.

11. CONFIDENTIALITY

11.1 Each Party agrees to maintain the confidentiality of Confidential Information and to use such information only for the purposes of performing its obligations under this Agreement. Confidential Information shall not include information that is or becomes publicly available through no breach of this Agreement or is rightfully received from a third party without restriction.

12. GOVERNING LAW; DISPUTE RESOLUTION

12.1 This Agreement shall be governed by and construed in accordance with the laws of the State of without giving effect to its conflict of laws principles. The Parties agree to seek prompt, good-faith resolution of disputes prior to initiating litigation.

13. NOTICES

13.1 All notices under this Agreement shall be in writing and delivered to the addresses set forth below or to such other address as a Party designates by notice. Notices shall be deemed given on receipt if delivered personally or by courier, or three (3) days after deposit in the mail.

14. AMENDMENTS; WAIVER; SEVERABILITY

14.1 No amendment to this Agreement shall be effective unless made in writing and signed by authorized representatives of both Parties. The failure of either Party to enforce any provision shall not constitute a waiver of that Party's right to enforce subsequently that or any other provision.

14.2 If any provision of this Agreement is held to be invalid or unenforceable, the remaining provisions shall remain in full force and effect and the Parties shall negotiate in good faith to replace the invalid provision with a valid provision that most closely approximates the Parties' intent.

15. ENTIRE AGREEMENT; COUNTERPARTS

15.1 This Agreement, together with any exhibits or attachments referenced herein, constitutes the entire agreement between the Parties with respect to the subject matter and supersedes all prior agreements and understandings, whether written or oral.

15.2 This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument.

16. MISCELLANEOUS

16.1 The Parties agree that any obligations intended to survive termination or expiration of this Agreement, including confidentiality, return or destruction of Personal Data, and indemnification, shall survive termination for the period necessary to satisfy those obligations.

16.2 The Parties represent and warrant that each has full power and authority to enter into this Agreement and that the person signing below is authorized to bind the respective Party.

Company Name:

By:

Date:

Service Provider Name:

By:

Date:

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What a Privacy Security Agreement Is and when it's used

A Privacy Security Agreement is a written contract that sets terms for handling, protecting, and sharing personal or sensitive data between parties. It defines data categories, permitted uses, access controls, encryption and breach response obligations, and obligations under federal laws such as HIPAA where applicable. These agreements also allocate responsibilities for subcontractors, technical safeguards, and incident notification. When executed correctly the agreement documents consent, governs liability allocation, and supports regulatory compliance across U.S. jurisdictions while remaining enforceable under federal e-signature law when signed electronically.

Why a clear Privacy Security Agreement matters

A concise agreement reduces legal ambiguity, documents consent and security commitments, and helps demonstrate compliance with U.S. frameworks such as HIPAA and ESIGN (15 U.S.C. ch. 96). It clarifies breach notification duties, access controls, and recordkeeping expectations for all parties.

Why a clear Privacy Security Agreement matters

Who typically prepares and signs this agreement

Organizations and counter-parties that collect, process, or access protected or personal data typically use a Privacy Security Agreement.

  • Small and mid-size businesses handling customer data, vendors, or contractors with access to personal information.
  • Healthcare providers and business associates subject to HIPAA who must document safeguards and execute a BAA when applicable.
  • Legal, finance, and HR teams arranging data-sharing with third-party service providers or cloud vendors.

Parties should ensure the signatory has authority to bind the organization and that the agreement aligns with applicable industry and state requirements.

Who has authority to sign and why it matters

Executive Signatory

A C-level executive or designated officer with corporate authority should sign when the agreement creates ongoing data obligations and binds the organization financially or operationally.

Operational Signatory

A department head, security officer, or authorized procurement manager may sign for limited or operationally scoped agreements if corporate delegation is documented and within approved thresholds.

Core elements to include in a professional agreement

Include clear clauses that allocate responsibilities, define data types and duration, and mandate specific technical and organizational safeguards.

Definitions

Precisely define terms such as "Protected Data," "Processing," and "Subprocessor" to avoid interpretive gaps during incidents or audits.

Scope of Use

Limit permitted uses of data to specific purposes and activities; require prior written consent for any secondary uses or transfers.

Security Controls

List required safeguards (encryption, access controls, logging) and minimum technical standards to which vendors must adhere.

Breach Response

Specify notification timelines, content required in notices, forensic cooperation, and remediation obligations following a security incident.

Audit Rights

Grant audit, inspection, or evidence-provision rights and specify frequency, notice, and confidentiality protections for audits.

Data Return & Deletion

Define retention, return, and secure deletion procedures on termination, including timelines and proof of deletion methods.

Essential security and privacy controls to specify

Encryption: TLS 1.2/1.3 in transit; AES-256 at rest
Access Logging: Detailed audit logs retained
Business Associate: BAA required for HIPAA-covered data
Data Minimization: Limit collection to necessary data
Retention: Retention schedule defined
Jurisdiction: Specify governing law and data residency

Step-by-step: completing a Privacy Security Agreement

Follow this sequential checklist to prepare, review, and execute the agreement efficiently while reducing legal and operational risk.

  • 01
    Identify Parties: Enter full legal names and authorized signatories.
  • 02
    Define Data: List categories and examples of personal and sensitive data.
  • 03
    Specify Safeguards: Name technical, administrative, and physical controls required.
  • 04
    Sign and Retain: Execute signatures and store records per retention rules.

How the agreement is reviewed and enforced in practice

A typical lifecycle moves from drafting and legal review to execution, monitoring, and termination with documented steps for incidents and audits.

  • Drafting: Prepare initial draft with clear data and control clauses.
  • Legal Review: Legal reviews liability, indemnity, and regulatory alignment.
  • Execution: Authorized signatories sign electronically or on paper.
  • Monitoring: Operational teams verify compliance and audit outcomes.

Typical digital workflow settings for execution

Configure the electronic workflow to capture intent, authentication, and an auditable trail consistent with ESIGN and UETA.

Field Configuration
Signer Authentication Email link or SMS OTP; increase strength for sensitive data
Signature Type Typed or drawn e-signature allowed; PKI where required
Audit Trail Capture IP, timestamp, and action log
Document Retention Store signed PDF with certificate of completion

Platform capabilities to look for when executing electronically

Ensure the e-signature platform supports robust authentication, secure storage, and compliance controls before relying on electronic execution.

  • Integrations: Salesforce, NetSuite, Google Workspace, Microsoft 365
  • File Support: PDF, DOCX, HTML, Excel
  • Compliance: SOC 2, ISO 27001, HIPAA-ready with BAA

Confirm audit trail detail, encryption standards, and ability to export signed records in PDF/A or standard PDF format for legal preservation.

Common timing and processing expectations

Set realistic deadlines for review, execution, and post-execution tasks so responsibilities and SLA windows are clear.

Review Period:

Allow 3–10 business days for legal and security review

Signature Window:

Specify deadline for signature, typically 7–30 days

Breach Notification:

Prescribe notification timeline, e.g., 72 hours to notify

Audit Response:

Require vendor to respond within 10–30 business days

Data Deletion:

Specify deletion timeframe, e.g., 30–90 days after termination

Common mistakes to avoid when drafting or signing

  • Vague definitions that fail to list specific data categories and permitted processing activities, causing interpretive disputes.
  • Missing authority for signatory or absent delegation documentation that can render enforcement or payment claims difficult.
  • No clear breach notification timeline or required contents, delaying legal and regulatory responses and increasing liability.
  • Relying on weak authentication without a retention plan for audit evidence, undermining electronic signature validity under ESIGN.

Key legal and financial risks from a deficient agreement

Regulatory Fines: HIPAA penalties (civil/administrative)
Contract Liability: Damages and indemnity exposure
Data Breach Costs: Notification, remediation, forensic costs
Reputational Harm: Customer loss and public disclosure
Evidence Gaps: Weak audit trail undermines defense
Enforceability Risk: Invalid signature or consent issues

Real-world examples of use and outcomes

Organizations use Privacy Security Agreements to operationalize vendor security obligations and speed onboarding without compromising compliance.

Optica Ventures LLC

Optica centralized third-party agreements to reduce review cycles

  • Reduced turnaround for vendor onboarding
  • The interface is simple and easy-to-use for our team; more importantly, it is just as easy for our customers.

Fertility Centers of Illinois

Health provider standardized BAAs and consent forms

  • Ensured consistent PHI protections across clinics
  • The airSlate SignNow team has been exceptional, responsive, the API has been great, and we're extremely happy that we chose airSlate SignNow as a company.

Comparing eSignature vendor pricing and key features

Basic pricing and feature availability across common eSignature vendors to inform platform selection for executing Privacy Security Agreements.

signNow DocuSign Adobe Sign PandaDoc HelloSign
Starting Price $8/user/mo $15/user/mo $14/user/mo $19/user/mo $15/user/mo
Free Trial Yes, 7-day free trial No No Yes, limited Yes, limited
Bulk Send Yes Yes Yes Yes No
Audit Trail Yes Yes Yes Yes Yes
HIPAA Compliant Yes Yes Yes No No

Frequently asked questions and common troubleshooting

Answers to common legal, technical, and operational questions about Privacy Security Agreements and electronic execution.


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