Motor racing is one of the world’s most dangerous sports, so it comes as no surprise that track owners, sanctioning bodies, race teams and sponsors purchase a specialized type of insurance to protect their interests.
Major exposures usually insured against include Primary & Excess Event Liability. This provides Primary Coverage for any and all incidents that could cause bodily injury and/or property damage during an event. This may range from a spectator slip and fall to a racing car accident that causes a spectator to be injured by the car or debris. The race track will also need Property Coverage for grandstands, video boards and all other assets. Employees will need Workers Compensation Coverage. Race tracks should also consider Rain Insurance and/or Event Cancellation Insurance for larger events. Given the considerable amount of tickets now sold online, all race tracks should carry sufficient limits of Cyber Liability/Data Breach Insurance.
Racing series exposures are similar to those of Race Tracks. A racing series should carry sufficient limits of Primary and/or Excess Liability depending on its contracts with the tracks/circuits they utilize. A racing series will typically have a fleet of vehicles needing Commercial Auto Insurance. A racing series will usually have a variety of equipment needed for the race (timing/scoring, inspection and other equipment), which requires Equipment Floater Coverage. Employees will be insured via Workers Compensation. A racing series commonly carries Excess Participant Accident Coverage to provide coverage for injuries to participants. A racing series will also need Property, Liability and other coverage for its home office or shop.
Drivers have their own unique exposures. The best avenue to insure a Driver for all of his or her occupational hazards is a Workers Compensation Policy. This coverage will generally pay 100% of all incurred medical costs due to injury and/or illness while racing. In addition, the Driver should carry specialty Disability Coverage to provide Temporary and Permanent Disability Coverage. There are several factors used to determine proper amounts based on Driver income and career point. Drivers at all ages and career stages need Life Insurance, which is best acquired through specialty insurance carriers. Many Drivers will need Liability, Commercial Auto, Excess Liability and other coverage to ensure they are properly insured as a Driver/Business.
Teams should carry the following coverage:
- Property Insurance for assets found in their shop/office which are stationary and do not travel.
- Scheduled Equipment policies insure racing cars/chassis and all other equipment that travels to racing events.
- Liability coverage for their race shop/office and Participant Legal Liability for all racing, testing and qualifying.
- Commercial Auto Insurance for all team-owned vehicles, including tractor units and transporters.
- Workers Compensation Insurance for all employees of the team.
- Excess Liability policies provide an additional limit of liability protection over and above General, Participant Legal, Auto and Employers Liability policies.
- Teams should also carry Employment Practices, Directors/Officers and Fiduciary Liability.