Cycle News - Archive Issues - 1970's

M ~ "- o l"- e> M 1ST u o ~ w Z ... w U >- U By Ron Schneiders From a dim past I recall a phrase that was originally uttered by some politician who was on the verge of, or in the process of, exterminating some large group of people. "Making the world safe for democracy," he said. I can't remember who said it, or what group he had his sights on, but the phrase had kind of a ring to it. Actually we Americans seem to have a fetish for making the world safe, at least for ourselves. We don't seem to be able to take real disasters with, say, the stoic courage of the ancient Greeks. We can kill millions in a war of our own making, but an accident that "claims twenty lives" drives us right out of our tree. One of the tools used to make the world safe is the' concept of liability. If you are hurt or killed, somebody, by God, is responsible, and somebody will pay. It doesn't matter, that you drove fifty miles to CONCLUSION see motorcyclists race at sp.eeds of 100 mph and then walked out in front of one of them. That's no act of God or madness. It's the fault of the promoter. He should have built an unscalable wall to protect you from your own inanity. The promoter needs insurance to protect himself from you. Promoter's insurance doesn't interest you? Well it should because you are involved in three different roles: spectator, participant and promoter. As a spectator you expect to be just that: a spectator. If something happens to disturb that role, such as an accident that makes you in fact a participant, or rain which leaves you with nothing to spectate, you start looking for some way to make somebody pay. As a participant, if you get hurt while racing, either from a genuine accident or from negligence (like a chuckbole in the track) you start looking for someone to pay the hospital bills. As a promoter? Well, when your club puts on an event, that's just what you are. And the fact that your club is incorporated and non-profit and gives toys to the kiddies at Christmas doesn't guarantee you immunity. To give you some idea of what insurance you as a promoter might buy, here is a partial listing of coverages available. 1. Spectator liability. Protects spectators from losses arising directly from the racing, like a wheel bouncing into the grandsJand. 3. General liability. Protects against things like falling grandstands. 3. Products. Covers losses arising from souvenir stands, parking lots, etc. 4. Personal injury, liability. Protects against suits for libel, slander, defamation of character, false arrest, etc. There is no coverage usually for suits arising from racial discrimination. 5. Contractual Liability. Protects the insured from suits by a third party arising from the insured's failure to fulfil a contract. 6. Participant's legal liability. Protects the promoter from a suit brought by a participant charging negligence, on the part of the promoter. 7. Pit and Track liability. Covers damage to the track. 8. Participant Group. Medical and life insurance for the racers and pit people. 9. Weather insurance. Insures the promoter against rain. 10. Performance bonds. To guarantee clean-up or restoration of property. 11. Auto Coverage. Protects the promoter when people are driving his cars in connection with the event. 12. Property Coverage. Protects against fire, water, burglary, etc. 13. Business interruption. Protects against loss of income during fire, flood, etc. 14. Crime. Protects against loss arising from crime, such as robbery, embezzlement, etc. 14. Umbrella. Protects against really h'uge catastrophe's such as a million dollar judgement. This large list of coverages is necessary because no insurance man could possibly say HI love you," without tacking on twenty-two pages of exclusions and ten pages of liability limits. To cover a race he has to write a book. One agent told me, "These amateur promoters just don't understand insurance." I suspect that he's right and they're fortunate. Understanding insurance does something unpleasant to your head. Before going farther it must be noted that there are really two kinds of insurance that promoters buy, or have the option of buying. One type primarily protects the promoter while the other primaruy protects the participant. Professional promoters must always buy spectator liability and quite often buy other types such as fire, weather, crime and so on. They sometimes, but not often, purchase participant coverage. Semi-professional and amateur promoters (including clubs) usually have no insurance or only a very restrictive spectator liability policy. To purchase spectator liability coverage a track must be "qualified" which means that it must be ultra-safe with respect to the spectators. In order for the track to be "qualified" it must have a 12-to I 5-footchain link fence surrounding the racing area, a retaining wall backed by several feet of earth, limited pit access and so on. In addition to thes'e basic requirements, a track becomes more "qualified" and gets lower rates when it has a large guard force, doesn't serve liquor on the premises, and meets other similar criteria. There are several companies that are willing to insure the highly qualified tracks such as Ascot, or the Ontario Speedway. As the tracks get smaller, and less qualified, the number of available insurance companies shrinks. The promoters of non-track events can't buy spectator insurance at all. I talked to the agent who handles the spectator insurance for Ascot Park. He asked me to mention his name in such a manner that small promoters and "unqualified" tracks wouldn't bother him. He said all he wanted were the "the cream of the crop" and the "blue chip accounts". I thought of a very good little track that was having trouble staying in business, partially because of inability to get .good, low cost insurance and I became more than a little irritated. Said agent told me, "I'm convinced that motorcycles are a fine risk, one of the safest spectator risks in racing." He also told me that he had never had to pay a race-related claim at Ascot. Nothing like no-risk insurance business. We racing types really admire a guy that doesn't want to take any chances, even with money. His name is Bob Benfield and he works for Bayly, Martin and Fay. Bet those "unqualified" types won't bother you, Mr. Benfield. Participan t insurance is sometimes purchased by promoters to cover the racers and pit people. The theory is that the guy who has his medical bills taken care of isn't likely to be quite so vindictive and might not sue the track. The theory is not working out too well because a number or rider-suits against track owners and promoters are pending. Stu Peters of Ascot told me that if judgments are granted to the riders and it looks like precedetn is being established, the tracks will be forced to stop motorcycle racing almost immediately. A promoter who wants to buy participant insurance can buy it from the, AMA (if it's a professional sanctioned event) or he can buy it from Harris Pinsky of Michael Bender and Assc. The AMA gets about $5.00 per rider per event while Pinsky currently gets $2.00 per rider per event. He has announced that rates will be increased to $2.50 for next year. All the promoters that I talked to who have had dealings with Pinsky either as clinents or prospective clients, felt that his rates were way out of liJ;le. Those who purchased the insurance did so simply because they had nowhere else to go. According to Stu Peters of Ascot, Pinsky was paid some $15,000 in premiums for participant coverage; Less than $3,800 was returned in loss payoffs. Mr. Pinsky also writes spectator liability and such, but he insures nothing that is not absolutely safe. "ElsinoreJ"t he said, "1 wouldn't touch the Elsinore Grand Prix with a 10-foot pole." He just laughted when I suggested that he might insure desert races. Those races aren't safe. Would your Checkers like Mr. Pinsky to insure your race? Just put up a 12 foot high fence from California to Arizona on both side of the course,l\ave everybody in the pits wear a white jumper and Mr. Pinsky will be glad to talk to you. Of course when you hear the rate you'll have to double the en try fee and charge all th e wives and kids an admission fee to break even. but that's the race biz. The promoters that I talked to aren't happy with the insurance situation. They would like to see some more competition in the field so the rates would be more reasonable and they would like to have some real statistics on race accidents. Pinsky keeps loss records and if he suffers a loss (which doesn't happen nearly 'often enough to persuade anyone that he's actually offering a service) then he simply endeavors not to insure that race or that kind of race again. I asked if there were any objective basis for the rates charged and he assured me that there was a solid body of acturarial data behind him. But when pinned down, he produced a mickey-mouse rating sheet that would be regarded as unsophisticated by a fifth grader. It simply gives the track a rating of excellent, good or poor on about five different items and weighs the different categories numerically. Since it's almost entirely judgmental, he can give the track whatever rating he chooses and charge what the market will bear. One of the most distressing aspects of this business is that the really good races disappear. With no real competition, Pinsky simply skims the Grem e de La Grem e and lets the rest manage as best they can. Thus we have the recurring phenomenon of great races dying at an early age while the mediocre ones seem to live forever. Really great races do not happen often. We had Catalina and Big Rear while the auto boys had Mille Milia, the Mexican Road Race and Watkins Glen. What's left? Well we have the Elsinore Grand Prix and the Isle of Man. The auto boys have' nothing that I would regard as a great race. Insurance is not the whole story behind the demise of great events, of course, but it is certainly a contributing factor. While a dangerous race isn't necessarily great (or even good) it seems that all the great races (auto, motorcycle or airplane) are dangerous, both to the participants and the spectators. Elsinore is a dangerous, great race. It seems unlikely that it can continue for long because there is no way to adequately cover the people who want to live dangerously in complete safety. Great races are almost never set up by professional promoters. Left to their own devices the professionals would give us an endless dreary succession of Ascot half miles, Peoria IT's and Sacramento Miles. Maybe a motocross now and again. It takes a club and someone in the club with some fire -to set up something like Elsinore. There is the mistaken impression that if the club is incorporated, its members cannot be touched financially. So the club sets up a great, but dangerous, race and everything goes fine until the first disaster. Then the race goes and usually the club goes with it. A person with enough legal talent who becomes involved in an accident at one of these races can not only get to the members of the sponsoring club, they can get to the racers as well. If you're waiting to find out how, forget it. I belong' to a club myself. The message for the clubs, though, is clear. Get a lawyer and find out to protect yourselves as individuals. Don't rely simply on the incorporation. Racers must be as careful as club members. The fact that you're in an organized competition does not guarantee you immunity from legal judgments. 1£ a spectator gets hit by you, he's going to go after the person or the organization that has the most assets. If that happens to be you, you'd better have a good lawyer or some insurance of your own. You think of the possiblity of hitting spectators in a race like Elsinore but there is also a fair chance of hitting some· one in a desert event, although I have never heardof such an occurrence. There are lots of rockbounds and those funny little people with rifles who shoot holes in everything out playing on the desert every weekend. Some restructuring of the laws of liability would solve a lot of problems in protecting promoting clubs, and participants from legal hassles. The answer doesn't like in persuading insurance agents like Pinsky to insure the more dangerous races. This could be done if the premium were high enough, but the event would then not be a financially viable proposition. What is needed is legislation that makes bone fide spectators at dangerous events le&i'lly responsible for themselves and their actions. Then when some woman takes her three kids and strolls out in front of a racer, not only would she not be able to collect damages, she migh t be liable for damages to the competitor. It would also free the competitor and the promoter from fmancial worry about real disasters, the things that used to be called "Acts of God" before He died. If a wheel comes off a racer and the bike flies into the crowd, whose fault is it? If the bike appeared sound at the beginning of the race, it's no one's fault; it happened. To hold the promoter liable appears ludicrous. On the other hand it does not seem at all unreasonable to assume that the spectators in question knew there was more risk in standing at the side of a race track than is for instance, watching the same race on tv. A restructering of these laws would also help the promoters of trac!< events by reducing their responsiblity to those items for which they are actually responsible. By doing this, they could get insurance at reasonable rates from any number of sources, since it is the racing liability that gives the insurance companies the feeling of insecurity.

• Cover