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New Kentucky statute establishes that indemnification clauses in motor carrier contracts are unenforceable

During the most recent Kentucky legislative session, Senate bill 59 was signed into law. The bill resulted in the establishment of KRS 281.592. The statute is intended to protect motor carriers from contracts with customers or others requiring indemnification or a liability insurance policy to cover the negligence of the promisee (i.e. the customer or delivery recipient) by deeming these provisions void. The pertinent section of the statute states as follows:

A provision, clause, covenant, or agreement contained in, collateral to, or affecting a motor carrier transportation contract that purports to indemnify, defend, or hold the promise harmless, or has the effect of indemnifying, defending, or holding the promise harmless, or requires a motor carrier to procure liability insurance covering the acts or omissions or both of the promise, from or against any liability for loss or damage resulting from the negligence or intentional acts or omissions of the promise, is against public policy and is void and unenforceable.

Previously, contracts between motor carriers and a delivery recipient could require the motor carrier to indemnify the delivery recipient from the recipient's own negligence. For example, should the delivery recipient negligently fail to maintain its premises and cause injury to the motor carrier's driver or a third party during the course of a delivery, the contract would require that the motor carrier indemnify the recipient for any damages resulting from the recipient's negligence. In the alternative, the contract might require the motor carrier to obtain liability insurance coverage for the negligence committed by the recipient or its representative(s). Under this setup, a motor carrier would be required to pay damages even though the accident was not caused by the motor carrier employee. With the establishment of this new statute, such a contractual clause is unenforceable and the delivery recipient would be responsible for damages caused by its own negligence.

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