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January 8, 2013 9:00 AM, EST

Michigan Approves Anti-Indemnification Law

Michigan Gov. Rick Snyder (R) has approved a law that prevents trucking companies from being held responsible for accidents, negligence or other damage that is a shipper’s fault.

The signing late last month makes Michigan the 36th state to pass an anti-indemnification law, which makes illegal any contract clause that shifts such liability to a carrier from a shipper, according to American Trucking Associations.

“This new law protects our truckers from unfair contracts that expose them to costly equipment damage without reimbursement by those responsible,” said Ken Silfven, a Snyder spokesman.

“Addressing this matter is an issue of fairness and it also helps to preserve our trucking industry, which plays an enormous role in driving Michigan’s economic prosperity forward,” he told Transport Topics.

A spokesman for state Sen. Jim Marleau (R) said he introduced the bill in December 2011 after he heard from a constituent who owns a trucking company and had to pay worker’s compensation to a driver who was injured at a shipper’s location. The incident was the shipper’s fault, but an indemnification clause made the carrier responsible, he said.

“Sen. Marleau believes that this levels the playing field and is good for business practices,” said Marleau’s spokesman. “It makes whoever’s at fault responsible for paying the damages.”

Marleau’s district includes Oxford, a small town where the gravel industry is very active. Many of the carriers that haul gravel in Marleau’s district are small companies, and it can be difficult for them to negotiate contracts with the large gravel suppliers, the spokesman said.

The Michigan Trucking Association lobbied in favor of the measure throughout the legislative process, said Walt Heinritzi, the group’s executive director.

“We’re elated at it passing and also being signed by the governor,” Heinritzi said. “It provides more equitable assignment of responsibility for negligence or accidents that occur on a shipper’s property. It gets Michigan in line with the majority of states.”