Pennsylvania no longer allows indemnity protection

| Thursday, December 16, 2010

A new law that is days away from taking effect in Pennsylvania does away with indemnification clauses in motor carrier transportation contracts.

Intended to level the playing field for trucking companies and professional drivers, shippers that improperly load product will be prevented from shifting liability. As of Dec. 19, contractual language to the contrary will be void.

Joe Rajkovacz, OOIDA’s director of regulatory affairs, said truckers welcome the news that the indemnity protection is now law in Pennsylvania.

“This law is good for truckers. It stops the predatory practice of truckers being coerced into indemnifying shippers or receivers from their own negligence,” he said.

Rajkovacz said the new rule also renders illegal the practice of receivers making unloading conditional on unattainable insurance.

“The practice is nothing more than a ploy to force truckers into paying for in-house unloading services.”

Specifically, the law voids indemnity provisions in all future contracts for the transportation, loading, unloading or incidental services of property by motor carriers for transportation.

Supporters say the rule change will help motor carriers to remain viable, particularly with the economy struggling.

Rep. Mark Longietti, D-Hermitage, said it is about fairness.

“Trucking firms ... are an important part of the local economy. They should not be forced to pay for someone else’s mistake, particularly during these difficult economic times,” Longietti said in a statement.

More than 20 states have passed some version of indemnification limitations. Louisiana, Iowa and Georgia are among the states to enact laws this year that address the issue.

To view other legislative activities of interest for Pennsylvania, click here.

Editor’s Note: Please share your thoughts with us about the topic included in this story. Comments may be sent to statelegislativedesk@ooida.com.

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