Race Owners and Sponsors Liability Coverage
Auto racing sponsorships are a great way to market your business, but are you covered for the risks?
Auto racing and motorsport events are exciting and a great way to connect with customers. In fact, it’s estimated that almost half of fans are willing to switch brands to buy race-sponsored products. And that could mean big revenue for your business.
You’ve thought about the opportunities, but have you considered the risks? Any time you get lots of people and lots of cars, heavy equipment, and alcohol in one place, things can go wrong—fast.
Risky Business
Accidents happen—both on and off the track. So, whether you plan on investing in a race team, venue sponsorship, or other event, or are looking to make a trade arrangement in exchange for publicity, you need to make sure you take steps to protect your business.
In the event of bodily injury or property damage at a racing event, you and your business could be named in a suit even if you are only a sponsor and even if your company had nothing to do with the incident.
Here are four tips for protecting your company and investment:
1. Talk to your team
Many sponsors believe they have insurance coverage through the team they sponsor. This may be the case, but it’s important to have an understanding of the team’s coverage and if it extends to sponsors. Be sure to have this discussion with the team you sponsor and have a contractual agreement in place.
2. Put it in writing
Make sure you have a written contract in place between your company and whatever business or group you are entering into a sponsorship agreement with. The contract should clearly
state that the race team, racing facility, or sanctioning body will not hold your business responsible for claims arising out of incidents related to the race team or the facility. Have all contracts and
addendums reviewed by an attorney.
3. Keep your partners covered
The race team, racing facility, sanctioning body, and any other business or organization you partner with must have insurance that covers spectator and participant liability. It’s important to not only verify that these coverages are in place, but to also have your company named as an additional insured.
4. Keep an eye on your coverage
When dealing with third parties—other businesses and sponsors, venues, and attendees—it is important to continually review your coverage. For example, many standard business insurance policies will exclude higher-risk ventures like racing. This is a common oversight with massive repercussions. It’s important to work with your insurance provider to make sure your coverage is complete. You may need to purchase your own Race Owners and Sponsors Liability coverage to make sure you are protected if the policies from the race team, racing facility, or sanctioning body are not enough to cover a loss.
To learn more contact:
Franco Ganino
(800) 390-9099
FGanino@alliant.com