New York could soon join a growing list of states doing 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.
A bill sent to Gov. Andrew Cuomo’s desk in the past week would forbid provisions in contracts that allow shippers to be indemnified for losses caused by their own negligence. It would make the contracts “void and unenforceable.”
Assemblywoman Donna Lupardo, D-Endwell, has 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 about A7307.
The Owner-Operator Independent Drivers Association supports the legislation.
Mike Matousek, OOIDA’s director of state legislative affairs, has called the legislative push in New York and other states a reasonable and fair solution to address regulations that essentially provide shippers and receivers with immunity from any damage caused by their negligence while a trucker is on their property.
He adds that doing away with the protection would prevent all parties to a transportation contract from granting themselves blanket immunity.
States lawmakers across the country have been active the past few years changing rules on indemnity clauses. To date, 44 states forbid unfair provisions from contracts. On Tuesday, Nov. 1, New Jersey was added to the list.
A full list of states and the laws where protections are in place is available. In addition to New York, states yet to adopt protections are Delaware, Mississippi, New Hampshire, Rhode Island and Vermont.
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 compensation or hire by the motor carrier, entry on property to load, unload, or transport property.
The protection would not apply to intermodal chassis, containers or other intermodal equipment.
To view other legislative activities of interest for New York, click here.
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