Safe harbor

Safe harbor

The term safe harbor (safe harbour) has several special usages, in an analogy with its literal meaning, that of a harbor or haven which provides safety from weather or attack.

Legal definition

A safe harbor is a provision of a statute or a regulation that reduces or eliminates a party's liability under the law, on the condition that the party performed its actions in good faith. Legislators include safe-harbor provisions to protect legitimate or excusable violations. An example of safe harbor is performance of a Phase I Environmental Site Assessment by a property purchasor: thus effecting due diligence and a "safe harbor" outcome if future contamination is found caused by a prior owner.


Main article: Watershed (television)

In broadcasting, particularly in the United States of America, the term safe harbor can refer to the hours during which broadcasters may transmit material deemed indecent for children. This "safe harbor", enforced by the Federal Communications Commission, extends — legally — from 10 PM to 6 AM.


In the context of commercial takeovers, safe harbors function as a form of shark repellent used to thwart hostile takeovers. Under implementation of this provision, a target company will acquire a troublesome firm in order to raise the acquisition price and make acquisition by other parties economically unattractive.

The Digital Millennium Copyright Act has notable safe-harbor provisions which protect Internet service providers from the consequences of their users' actions.

The Private Securities Litigation Reform Act of 1995 includes safe-harbor provisions to protect companies which make financial and investment forecasts in public markets.

The United States Department of Commerce runs a certification program which it calls Safe Harbor and which aims to harmonize data privacy practices in trading between the United States of America and the stricter privacy controls of the European Union Directive 95/46/EC on the protection of personal data. For more information, see Safe Harbor Principles.

The Public Health Service publishes a set of Safe Harbor rules within Title 42, Code of Federal Regulations, to preclude Life Science companies from withholding important medical information from the public for fear of being prosecuted for Medicare violations. It is illegal for a firm to advertise or promote a drug, biologic, or medical device for a purpose other than an indication approved by the Food and Drug Administration; recommending such off-label use for a product subject to reimbursement under Medicare or Medicaid constitutes felony fraud. Safe Harbor establishes rules defining when and how such information may be published (for example, medical journal reports of clinical trials) without the company running afoul of advertising and marketing restrictions.


In accounting, the term safe harbor may refer to the method by which corporations would rather (typically) incur tax consequences than follow the precise requirements of their respective tax codes.

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