It's the middle of racing season and the arrival of summer is awelcome time for the world of motorsports. As each type ofmotorsport — from monster trucks to the Indy500 — features a different racing style, there truly issomething for everyone.

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“When you're talking about racing in general, I would say thatthere's a lot of different flavors to choose from and most peopleare going to find one of the types of racing interesting towatch,” says Alex Baiseri, a broker with specializedexperience in entertainment, production, sports andmotorsports.

Still, motorsports remain niche in comparison to other televisedsports. But, just like any other sport, there are similar insuranceneeds that businesses involved need to account for — andothers that totally unique to the world of motorsports.

Business as usual

“If you look at it from a standpoint of it being a business, youhave your standard property, general liability, workers'compensation, business auto (for transporting the equipment and theteams to the racing events),” says Baiseri. “All your normal nutsand bolts of insurance.”

The racing teams are effectively a business, and they operatetheir business based on sponsorship dollars. The hierarchy isfairly simple: the racing venue, the sanctioning body, teams,drivers, and sponsors.

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“When it comes to racing events, there is a relationshiphierarchy that is established for general liability and thestructure of the events, similar to concerts or large sportingevents,” says Alex Baiseri.

A unique sport requires unique insurance

Vehicles used on the racetrack are not like any vehiclethat most people drive, and so, the coverage that can apply to themvaries with it.

“When we're talking about the competition vehicles, they areconsidered equipment. So they're not licensed for the road, andauto liability does not apply in this particular case when they'rein the venue,” says Baiseri.

In addition to the racing equipment, there is somethingcalled owners and sponsors insurance. Since logos and money are ondisplay to the general public, this liability policy protectsthose sponsors in case they got called into some randomlawsuit.

Hypothetically, if a vehicle goes off a racetrack and doesdamage or hurts somebody, everybody in the motorsports hierarchycan be named in the suit. Owners and sponsors insurance providescoverage so those involved cannot get named.

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Also, the drivers tend to be independent contractors forthe most part. Since they're not an employee of the team, they mustinsure themselves.

“The policies they [the drivers] need to get are generally likeany sports athlete, people making a lot of money in doing somethingthat could injure them. So you're talking aboutdisability, and they need to have their own workers' comp and lifeinsurance because they're independent contractors,” saysBaiseri.

Don't try this at home

For those with an inner speed demon, motorsport country clubs doexist. But beyond not being safe, the risks can be huge in terms ofinsurance.

“A lot of people who are well off will take their Porscheor whatever they have and do hot laps around race tracks,” saysBaiseri. “It is important to know that once you take your vehicleand put it on a racetrack, your personal auto doesn't applyanymore. So any damages you do or damage to the vehicle iseffectively not covered.”

The appeal of motorsports can range from the competition betweendrivers to the excitement of driver's pushing their vehicles to thelimit. Like any other sport, accidents can happen; but withinsurance, motorsports and its numerous fans can keep crossing thefinish line.

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