An effort halfway through the New Jersey statehouse 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 Senate voted unanimously to advance a bill to do away with indemnification clauses in trucking contracts. Specifically, 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.”
Sponsored by Sen. Peter Barnes, D-Middlesex, the bill now moves to the Assembly.
States lawmakers across the country have been active the past few years changing rules on indemnity clauses. To date, 42 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 New Jersey, states yet to adopt protections are Delaware, Mississippi, New Hampshire, New York, Ohio, Rhode Island and Vermont.
Affected contracts in New Jersey 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 bill, S1380, awaits consideration in the Assembly Transportation and Independent Authorities Committee.
Across the state line in New York, a nearly identical effort is also underway.
Assemblywoman Donna Lupardo, D-Endwell, said because indemnification language is commonly included in contracts, motor carriers have no choice but to accept the terms.
“This legislation will not limit anyone’s ability to collect for damaged goods, but will simply hold the responsible party liable,” Lupardo wrote in a memo on the bill.
The Owner-Operator Independent Drivers Association supports the legislative push.
Mike Matousek, OOIDA’s director of state legislative affairs, said the legislation is a reasonable and fair solution to prevent all parties to a transportation contract from granting themselves blanket immunity.
“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.”
The protection sought by Lupardo would not apply to intermodal chassis, containers or other intermodal equipment.
The bill, A7307, is in the Assembly Transportation Committee.
To view other legislative activities of interest for New York, click here. For New Jersey information, click here.
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