New York bill would forbid indemnity clause

By Keith Goble, Land Line state legislative editor | Tuesday, January 22, 2013

Nearly three-quarters of all states have acted to improve fairness for truck drivers doing business in their state.

A New York bill would add the state to the list of states 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.

Sponsored by Sen. George Maziarz, R-Newfane, the bill would outlaw provisions in contracts that provide for shippers to be indemnified for losses caused by their own negligence and make them “void and unenforceable.”

States across the country have been busy in recent years changing rules on indemnity clauses.

In the past year alone Alabama, Hawaii, Massachusetts, Minnesota and South Dakota acted to forbid the provisions in motor carrier contracts. Starting March 28, Michigan will become the 36th state to adopt the protection from the unfair clauses.

A full list of states, and the laws, where protections are in place is available.

Maziarz wrote in a memo attached to the bill that “because indemnification language is commonly included in contracts, motor carriers have no choice but to accept the terms.”

He also noted that the bill would not limit anyone’s ability to collect for damaged goods “but will simply hold the responsible party liable.”

Affected contracts in New York would be defined as “a 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, containers, or other intermodal equipment.

The bill – S1087 – is awaiting consideration in the Senate Transportation Committee.

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

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