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The track day season has started in earnest with Brands Hatch kicking off the season with their first day on 01st February. The full MSVT calendar can be viewed on their website but by way of summary Brands have produced the following dates so far: 

Right -  lets go back to basics – insurance for your car or bike is split into two “components”:

(1) Accidental Damage, Fire and theft (for the purpose of this we will ignore the “theft” bit since we have yet to find a car/bike that has been stolen while travelling at high speed and

(2) Third Party Liability. By law this is the bit you must have. There are two “elements” to this:

(2.1)  Bodily injury to someone else. to drive / ride on the public highway. 

(2.2) Damage to someone else’s property (their car / bike being the obvious)

So why don’t my insurers cover trackdays? It depends which “component” you are asking about.

(1) Accidental Damage: Some regular insurers will provide an extension* to their policy but this is damage to YOUR - but that is it!! (2) Third Party Liability: This is a different ball game.You have NO cover. You are on your own. There are no insurers who regularly provide third party liability cover for track days.

GULP!!! So does this mean I can be held liable? Technically, at law, YES

For how much? Who knows? … as a guide….your regular road insurance policy will show that for “bodily injury” the quantum is  “unlimited” and for third party property damage the minimum by law has to be £1m.

This is getting scary - what about the disclaimers? What about them? The disclaimers you sign are designed to protect the track and organiser first and foremost. They have their own public liability insurance policies to protect them and their cover will not extend to cover you hitting someone else. However, neither they or you - by law - can contract out of injury to someone else.

What does that mean? It means irrespective of what is signed and by whom, the duty of care and responsibility to others remains as fixed as ever at law.

This is getting me worried now….. OK – lets finish with the scary bits first. A few feathers have been ruffled recently and this whole issue has been thrown out in the open following a quite ridiculous decision by a judge.

It was ruled that because at track day was not a competitive race and was more akin to a “time trial” (yep, that’s what was said) then the standard of driving in such situations was comparable to that of a reasonable driver on the ordinary road.   

Was this the first such case? No…. and it also contradicts a previous test ruling. His Honour Judge Mitchell concluded that if someone crashes into you on a trackday, even if it is clearly their fault - then tough! The judgement followed a case where a driver under tuition collided with a track day participant who then sued for damages. In essence the judge's ruling is that anyone participating on a trackday is aware of the potential risks involved and has a choice of not driving on to the circuit. (Source: Circuitdriver.com, April 2007). The judge who made the more recent decision failed to appreciate what a track day is all about and is why a Press Release from Chaucer Insurance states:

“A track day is a non-competitive event that allows an individual to drive their vehicle outside of the Road Traffic Act requirements. There is no racing; lap timing; time, speed or distance targets; or winners and losers”

MORIS.co.uk state on their policies that a Track Day is defined as:

……a strictly non competitive (no timing, pacemaking or racing) day at a race circuit where road registered vehicles can be driven /ridden by individuals holding a full driving licence on a race circuit without speed restriction. Drivers must adhere to all safety briefings provided at the beginning of each trackday.

Further: “Trackday insurance is a limited cover and does not follow all of the conditions of standard motor insurance”.

So why did the judge in the more recent case not consider what Judge Mitchell had said? This is only County Court level and such rulings DO NOT create law that is set in stone. In other words – no legal precedent has yet been formally established.

Now I really am confused…. Where do I stand if I am involved in an accident on the track with someone else?

Nothing has really changed – everyone is in the same boat as they always have been – you are there at entirely your own risk, but this is what Justin Everitt says as an MSA licence holder and track day enthusiast:

“I would not be dissuaded by the recent court ruling which was only at county court level so THERE IS NO PRECEDENT SET IN LAW. There could be another case next week that would rule differently. The answer therefore is:

(1) trackday organisers need to tighten up on declaimers and point out in plain speak – that a track day might all end in tears and

(2) individuals have GOT TO TAKE THEIR OWN RESPONSIBILITY more and insure their car AND themselves!!.

"I am an insurance broker specialising in Track day insurance. My car will be insured against all the nutters out there, I will be insured against all the nutters out their who might put me in a wheel chair. I have NO cover for anyone else – they should take their own responsibility and insure their car/bike – AND themselves”.

By way of further comment Justin Everitt adds:
“If I read the Chaucer statement correctly, then driver A with the damaged car claimed from REIS for accident damage and was paid. Some bright spark within Chaucer decided it would be a jolly good idea to subrogate against driver B for causing the damage – so it was the insurance company themselves that instigated the whole proceedings not Driver A. This is a very odd thing to do and would imagine a fine company like Chaucer must be asking questions of themselves right now….”

What about stickers? We have sometimes wondered if there is merit with Trackday Organisers determining at the outset those who are and are not insured by virtue of displaying a sticker on cars / bikes saying - “I am insured” or “I decided not to insure and accept the risk is totally down to me”. What do you think?

OK, but I still don’t understand why insurers don’t provide third party cover on a track day? Why would they? Driving on the road we have speed limits, rules, codes and laws that establish boundaries. Follow these and any reasonable person should be able to drive quite safely – yet accidents happen on the road every day of the year. Going onto the open race track where you are allowed to go as fast as you like (or can) and where limits speed, adhesion and talent are being explored – is not something insurers want to entertain.

A trackday Insurer might be prepared gamble on the cover for a £60k GTR being destroyed but it is reasonably foreseeable that it is going to end in tears and a £2m lawsuit for the guy you put into a wheelchair is a different level of risk that insurers seek to avoid. Insurers are not under any obligation to insure hazardous activities. Would you feel comfortable as an underwriter in a big insurance company signing off on this as a great “opportunity” ?

There is also the ethical issue, no insurance company wants to be accused of opening Pandora’s Box for participants suing participants.

Is there really no place to get any third party liability cover? Hmmmm…… it IS sometimes possible to buy a Third Party Liability policy from the NON MOTOR insurance market. Usually such policies are bought by “high net worth” individuals who wish to protect their …….. well….. high net worth…..The only other worthy note is the only track day insurance provider who can offer Third Party PROPERTY Damage is Ryan Motorsport Insurance under their track day banner Insure My Track Day. They explain that they can provide cover to the Armco barriers for Nurburgring Nordschliefe and their policies automatically include cover for up to £2,000 of costs for the Armco truck attendance plus removal and replacement of Armco. There is an option on the quote request form to increase this sum insured to £4,000 for an additional premium.

Great – can I not have one of these policies? Well, the premium might be anywhere from £1,000 to £2,500 – IF there is a willing insurer around. It is a reflection of what a non motor insurer needs to charge just to put a policy on the books. The Limit of Indemnity might be capped at £2m. Quite frankly this all makes for a very expensive track day.

So what is the most practical answer? Everyone should insure against being hit by someone else. They should insure their car and themselves OR just accept the risks……

REIS are a leading track day* (see definition below) insurance broker who arranges motorsport and track day insurance policies through Chaucer Insurance.

Chaucer Insurance has been underwriting specialist motorsport insurance for 15 years.REIS offer an accidental damage policy to cover participants for damage to their own vehicles. The track day fraternity generally accepts that all participants pay for damage sustained to their own vehicles, regardless of the circumstances and every participant signs a disclaimer intended to put this principle into effect. However, we have had our concerns regarding the validity of these disclaimers and their ability to protect individual track day participants from suing each other in the event of damage to their vehicles.

In agreement with our policyholder following significant damage to his vehicle through no fault of his own, we pursued a recovery from a driver who had collided with our insured’s stationary vehicle on the grass verge just off the track. At the court hearing last week it was held by the judge that the disclaimer did not protect the track day participant who caused damage to a vehicle that Chaucer Insurance covered under a policy arranged through REIS. The participant was ordered to pay for the damage he had caused to the other vehicle, as a result of his negligence which was established by the court through CCTV evidence.

In this instance, Chaucer Insurance will not be pursuing the award issued to them by the county court. Last weeks court case does not set a precedent for any future actions as the claim was held in a court of 1st Instance. Now that it has been established that current  disclaimers are not protecting track day participants sufficiently, we have taken legal advice which recommends that the following clause to be inserted into track day disclaimers:

‘It is a condition of your participation of the activity, or activities, in which you intend to take part that in the event of accident, loss or damage occurring during such activity or activities you will not pursue any claim for damages against any other participant (save in respect of injury or death)’

Under the provisions of the Unfair Contract Terms Act 1977 it is not possible to exclude potential liability for injury or death. If this clause is inserted into all disclaimers and every participant signs the document prior to commencing the activity then it is the view of our legal opinion that a court would enforce the clause.

Please be assured that REIS and Chaucer remain committed to a vibrant and exciting track day market. Implementation of the above clause should ensure that it remains so.

*A track day is a non-competitive event that allows an individual to drive their vehicle outside of the Road Traffic Act requirements. There is no racing; lap timing; time, speed or distance targets; or winners and losers.

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By way of "post script".....

This is what MORIS.co.uk  say under their FAQ's

Am I covered for third party damage?
No. You have no coverage for any liability to third parties, whether personal injury/death or property. Damage is your problem following a test ruling at Wolverhampton County Court. His Honour Judge Mitchell concluded that if someone crashes into you on a trackday, even if it is clearly their fault - then tough! The judgement followed a case where a driver under tuition collided with a track day participant who then sued for damages. In essence the judge's ruling is that anyone participating on a trackday is aware of the potential risks involved and has a choice of not driving on to the circuit

Trackday Insurance online by MORIS.co.uk | Trackday Insurance FAQ's