New York state lawmakers could soon remove the state from the short list of states yet to do away with indemnification clauses in trucking contracts. The clauses are created to protect shippers or hold them harmless from anything that happens with a shipment.
The Senate voted on Tuesday, June 14, to approve a bill to forbid 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, A7307, awaits final clearance in the Assembly before moving to the governor’s desk.
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 in a memo on the bill.
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 existing rules that essentially provide shippers and receivers with immunity from any damage caused by their negligence while a trucker is on their property.
He added 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, 43 states forbid unfair provisions from contracts. On Nov. 1, 2016, New Jersey will be 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. http://www.landlinemag.com
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