The Contract Counterattack: Four Layers Every Trucking Company Must Understand Post-Montgomery
The Supreme Court’s Montgomery decision will be remembered as the moment broker liability for negligent carrier selection became settled law. What may be less remembered — but equally consequential — is what happened the morning after in legal departments and risk management offices across the country.
Every broker. Every shipper. Every logistics company with a transportation contract on file began the same quiet conversation: How do we make sure the trucking company is on the hook if this happens to us?
The answer, predictably, was indemnification. And that answer, equally predictably, is more complicated than it looks.
The Post-Montgomery Reflex
To understand why brokers and shippers will flood transportation contracts with indemnification demands, you have to understand what Montgomery actually created.
Before the decision, the dominant legal posture treated brokers as arrangers — not participants — in the transportation relationship. Plaintiff’s lawyers strained to reach brokers through various theories, but the wall of federal deregulation largely held. Post-Montgomery, that wall has a door. A broker that negligently selected a carrier — one with a history of safety violations, poor CSA scores, inadequate training records — now faces direct exposure to the bodily injury verdict that follows.
A $20 million nuclear verdict against a carrier becomes a $20 million question about who selected that carrier and why.
The broker’s immediate legal response is contractual: You indemnify me. If a plaintiff gets to me because of your performance, you make me whole.
That reflex is legally understandable. It is also legally treacherous — for both sides.
Layer One: The Language
The threshold question that practitioners routinely underestimate is the simplest one: What exactly does the contract say?
Indemnification provisions in transportation contracts exist on a spectrum. At the broadest end — broad form indemnification — the carrier agrees to indemnify and hold harmless the broker or shipper for any claim arising from the transportation relationship, including claims caused by the broker’s or shipper’s own negligence. The language typically reads something like: “Carrier shall indemnify, defend, and hold harmless Broker from any and all claims, losses, damages, or expenses arising out of or relating to Carrier’s performance under this agreement, regardless of cause.”
At the narrow end — limited or comparative form indemnification — each party bears its proportionate fault. The carrier agrees to cover claims caused by the carrier’s negligence; the broker covers claims caused by the broker’s negligence.
The post-Montgomery drafting pressure will be intense: brokers will push hard for broad form language. They want to sweep in negligent selection claims — claims that arise, by definition, from the broker’s own conduct — as “arising out of” the carrier’s performance.
The harder they grab, the less they hold.
Layer Two: The Anti-Indemnity Statutes
The trucking industry spent two decades fighting indemnification overreach before Montgomery was decided. The American Trucking Associations, state trucking associations, and OOIDA successfully pushed anti-indemnification legislation in state after state, beginning in earnest in the mid-2000s and continuing through the 2010s.
The results: as of today, 46 states have enacted some form of anti-indemnity statute applicable to motor carrier transportation contracts. Only Delaware, Mississippi, New Hampshire, and Vermont have not.
The critical practical point: in many of these states, an indemnification provision that violates the statute is not reformed — courts do not rewrite it to make it enforceable at a narrower scope. It is void. Unenforceable. As if it were never written.
A broker that insists on broad indemnification language may not get a narrower version. It may get nothing. The carrier signs a contract with an unenforceable indemnification clause — and the broker may be left exactly where it started, except now it has a false sense of protection.
Layer Three: The Choice of Law Gordian Knot
This is the layer that generates the most expensive litigation, and the one that most transportation professionals have never seriously considered until a lawsuit forces the question.
The anti-indemnity statutes are state laws. Their applicability to any given contract depends on which state’s law governs the contract. Without a choice of law clause, determining which state’s anti-indemnity law applies requires working through a multi-variable analysis that no one can resolve without litigation: Where was the contract negotiated? Where did the carrier pick up the load? Where was it delivered? Where is each party domiciled? What choice-of-law rules apply?
In other words, a law school exam question.
Watch for a specific play post-Montgomery: brokers drafting choice of law clauses selecting Delaware, Mississippi, New Hampshire, or Vermont — the four remaining states without anti-indemnity statutes — regardless of whether those states have any connection to the transaction. The goal is obvious: manufacture enforceability by contract selection.
The lesson for carriers: if your transportation contract has no choice of law clause, you don’t know what law governs your indemnification obligation. You will find out when the Court tells you.
Layer Four: Does Your Insurance Cover What You Just Agreed To?
This is where carriers get genuinely blindsided. It is also the layer where the 2013 ISO revisions to commercial general liability additional insured endorsements intersect in ways that most insurance professionals haven’t fully mapped.
In 2013, ISO revised its standard additional insured endorsements in direct response to the proliferation of state anti-indemnity statutes. The revised forms — including the widely used CG 20 10 and CG 20 37 — added two critical limitations: (1) coverage for additional insureds applies only to the extent permitted by law; and (2) coverage will not be broader than what the named insured is required by contract to provide.
The implication: if the underlying indemnification obligation is void under a state anti-indemnity statute, the insurance coverage tied to it may also evaporate — because there is nothing “permitted by law” to cover.
For carriers, the practical question is this: Before you sign a post-Montgomery transportation contract with indemnification and additional insured requirements, have you confirmed whether your policy’s definition of “insured contract” covers the specific obligation you’re assuming? Have you checked whether the 2013 ISO language is in your endorsement form? Have you tendered the specific contract language to your insurer before signing?
The Denuclearization Connection
The Denuclearization thesis is simple: nuclear verdicts in trucking cases are not inevitable. They are the product of predictable strategies — Reptile Theory, third-party litigation funding, nuclear venue selection, and the exploitation of subjective expert testimony — that can be disrupted by objective data, rigorous preparation, and systematic defense.
Montgomery adds a new chapter. The contract counterattack — the flood of post-Montgomery indemnification demands — is the plaintiff’s bar’s next tool for spreading nuclear verdict exposure beyond the carrier and into the carrier’s relationships.
The defense is not complicated, but it requires advance preparation. Before signing any transportation contract with indemnification language post-Montgomery:
→ Have counsel identify the specific provision’s scope and whether it reaches the broker’s or shipper’s own negligence
→ Map the applicable state anti-indemnity statutes — including the choice of law question
→ Confirm or negotiate a choice of law clause that reflects where the transaction actually occurs
→ Tender the specific contract language to your insurer before signing — not when the claim arrives
→ Confirm your policy’s coverage for the specific obligation assumed
Montgomery changed what plaintiffs can target. Don’t let your contract change who actually pays.
Doug Marcello is a trucking defense attorney at Saxton & Stump and founder of TransportCenter. The Denuclearization Series publishes weekly at TransportCenter on Substack. This article is for informational purposes only and does not constitute legal advice.