Unfair clauses in trucking contracts are the subject of a bill introduced in the Kentucky Senate.
Sen. Ernie Harris, R-Crestwood, introduced a bill for consideration that would 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.
The provisions in contracts that would be outlawed provide for shippers to be indemnified for losses caused by their own negligence and make them “void and unenforceable.”
States lawmakers across the country have been active the past few years changing rules on indemnity clauses. A total of 40 states have acted to forbid unfair provisions from contracts.
A full list of states, and the laws, where protections are in place is available. States yet to adopt protections are Colorado, Delaware, Kentucky, Mississippi, New Hampshire, New Jersey, New York, Ohio, Rhode Island and Vermont.
Supporters say that indemnification clauses can require freight carriers to take on liability for the negligence of shippers. As a result, truckers are responsible for trailer packing, even though shippers actually do the packing.
They say the contract clauses are bad for the trucking industry. Another complaint is they create a safety issue because the shipper’s incentive to perform its duties in a prudent and reasonably safe manner is eliminated.
Affected contracts in Kentucky 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 or other intermodal equipment.
Harris’ bill, SB59, is in the Senate Transportation Committee.
Copyright © OOIDA