A little more than a handful of states across the country have yet to act to address unfair clauses in trucking contracts. An effort underway at the Arkansas Legislature would take the Natural State off the short list of states that have failed to take action.
The Senate voted 24-5 to do away with indemnification clauses in trucking contracts. The clauses are set up to protect shippers or hold them harmless from anything that happens with a shipment.
If signed into law in Arkansas, provisions in contracts would be outlawed that provide for shippers to be indemnified for losses caused by their own negligence and make them “void and unenforceable.”
The Owner-Operator Independent Drivers Association supports the legislation, SB755, in the Arkansas statehouse. The Association recently sent a letter of support to the bill sponsors.
Mike Matousek, OOIDA’s director of state legislative affairs, calls legislative efforts like this a reasonable and fair solution to address existing rules that essentially provide shippers and receivers with immunity from any damage caused by their negligence while a trucker is on their property.
“Truckers should not be held liable for damages or injuries that are caused by the negligence of shippers and receivers,” Matousek said. “Conversely, shippers and receivers should not be held liable for damages or injuries that arise from the negligence of a trucker.”
“SB755 is a reasonable and fair solution that will prevent all parties to a transportation contract from granting themselves blanket immunity.”
States lawmakers across the country have been active the past few years changing rules on indemnity clauses. To date, 41 states have acted to forbid unfair provisions from contracts.
A full list of states, and the laws, where protections are in place is available. In addition to Arkansas, states yet to adopt protections are Arkansas, Delaware, Mississippi, New Hampshire, New Jersey, New York, Ohio, Rhode Island and Vermont.
Affected contracts in Arkansas would be defined as “an express or implied contract, agreement, or understanding” between a motor carrier and a shipper covering the transportation of property for hire by the motor carrier, entry on property to load, unload, or transport property, including the storage of property.
The protection would not apply to intermodal chassis or other intermodal equipment.
The bill, SB755, awaits further consideration in the House. If approved there, it would move to the governor’s desk.
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