With anti-indemnification laws finally enacted in both New York and New Jersey, the playing field has gotten a little more level. Beginning November 1st in New Jersey and November 4th in New York it will no longer be permitted for shippers to make carriers indemnify them for all damages that arise in the course of their relationship, even those that the carrier may have had nothing to do with. Now, as it should be, each party is responsible for its own negligence, if any.
Due to the unequal bargaining position of shippers and small contractors, many small carriers were finding that, if they wanted the work, they had to agree to indemnify the shipper for any and all damages that might occur…. even if not it was not their fault. Think of a driver slipping on ice in the shipper’s yard or, worse, a shipper sends spoiled food via a carrier to a merchant and the merchant then rejects it. Such unfair shifting of these burdens was very costly to carriers. These situations are what the new laws attempt to address.
This has been a problem across the country. Both the American Trucking Association (ATA) and the Owner Operator Independent Drivers Association (OOIDA) strongly supported this legislation. Here in New York, The Trucking Association of New York (TANY) and others has been lobbying for this legislation for several years. In the interest of full disclosure, we’ve gone to Albany with TANY for several years on this and other measures.
New Jersey and New York are the 44th and 45th states respectively to sign this type of legislation. Only Delaware, New Hampshire, Rhode Island, Vermont, and Mississippi still allow indemnification clauses in shipping contracts.