Indemnification clauses in trucking contracts could soon be on the way out in New Jersey. 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 the governor’s desk that would 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.”
The bill, S1380, now awaits Gov. Chris Christie’s signature. Assembly lawmakers already approved it by unanimous consent.
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.
Intermodal chassis, or other intermodal equipment, would be excluded from the protection.
The Owner-Operator Independent Drivers Association supports the legislation.
Mike Matousek, OOIDA’s director of state legislative affairs, has called the legislation 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,” he said. Conversely, he said shippers and receivers should not be held liable for damages or injuries that result from the negligence of a trucker.
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