Alabama poised to forbid indemnity clauses in truck contracts
05/07/2012 - 11:11:13 am
The Senate voted unanimously to advance a House-approved bill to Gov. Robert Bentley’s desk. The bill – HB339 – calls for 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.
Once signed into law, Alabama will become the 32nd state to outlaw the provisions in contracts that provide for shippers to be indemnified for losses caused by their own negligence and make them “void and unenforceable.”
South Dakota and Minnesota already acted this year to protect truck drivers from the clauses. The Minnesota rule took effect immediately. South Dakota’s protection is set to take effect July 1.
Supporters say that indemnification clauses 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, and 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 the Alabama bill are defined as “a bill of lading, contract, agreement, or other 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 does not apply to intermodal chassis, containers or other intermodal equipment.
By Keith Goble, Land Line Magazine state legislative editor