Wisconsin nears indemnification protection

| Wednesday, June 15, 2011

A bill on its way to the governor is designed to level the playing field for truck drivers in Wisconsin.

The Legislature advanced a bill to Gov. Scott Walker to do away with indemnification clauses in motor carrier transportation contracts. The clauses are set up to protect shippers or hold them harmless from anything that happens with a shipment.

Sen. Mary Lazich, R-New Berlin, told lawmakers during a recent hearing on the bill – SB41 – that a fix is needed.

“Indemnification clauses require freight carriers to take on liability for the negligence of the shipper. In practice, this means that a trucker is responsible for the trailer packing, even though the shipper packs the truck,” Lazich said in prepared remarks.

Nearly 30 states have already acted to outlaw the provisions in contracts. If signed into law, motor carrier contracts in Wisconsin that provide for shippers to be indemnified for losses caused by their own negligence would be “void and unenforceable.”

Affected contracts are defined as “any agreement, regardless of whether it is written, oral, express, or implied,” 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, or any service incidental to such activity, including the storage of property.

OOIDA Director of Regulatory Affairs Joe Rajkovacz has said the indemnification protection would effectively prohibit a receiver from pre-conditioning unloading by attempting to require the motor carrier to obtain specific insurance coverage that many times is not commercially attainable.

Rajkovacz says the receiver often requires itself to be named as co-insured on a policy.

“This type of scam is often used by receivers to force motor carriers into paying for unloading services provided by the receiver – services from which they profit dramatically,” he says.

Rep. John Nygren, R-Marinette, told lawmakers in prepared remarks that the bill is sound public policy that maintains the incentive for both parties to act responsibly in a motor carrier transportation contract.

“This legislation will provide one of our most important industries with the stability and security to operate for years to come,” Nygren stated.

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

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

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