Many local trucking companies have been confronted with contracts containing an Indemnity clause. It typically states:
“CARRIER shall at all times indemnify, defend and hold harmless BROKER, its parent, subsidiaries and affiliates, and their respective directors, officers agents and employees against and from any and all claims arising from the services provided hereunder (including, without limitation, claims for personal injury, death and damage to property, clean‑up costs from commodity spills and damage to the environment, whether or not caused by (a) by any agent or employee of CARRIER or (b) by any other person or entity. The provisions of this Paragraph shall survive cancellation, termination, or expiration of this Agreement.”
This means that even if an accident is caused by the broker’s negligence, or shipper’s negligence, or by any reason whatsoever, the carrier is responsible to pay legal fees, claims, and judgments against the broker. Of course, this is very unfair. The problem has been that carriers are rarely given a choice. The attitude is typically, “sign this or forget about getting work,” and, because of business pressures, many sign. Some insurance policies would not pay such a claim, so the carrier is risking its very existence by signing such a document.
Well, help is at hand in most of the USA. During the past two years, most states have passed, or are considering passing, an “anti-indemnification” law. The law invalidates any clause that forces the carrier to indemnify the broker. If you live in a state that has passed “anti-indemnity” laws, you can safely sign contracts that contain the clause and know it cannot be enforced.
WARNING! If the contract states that it shall “be construed under the laws of …….”, with a different state filled in, make sure THAT state is one that has passed an “anti-indemnity” statute or you WILL NOT be protected.
To see a map of states which have passed “anti-indemnity” statutes, click here.