MOD 044: Yesterday Is Too Late For Insurance
Merchants of Dirt Episode #44
Insurance is the minimum financial protection a race director needs to protect themselves, their staff, their volunteers, their business, and their family from other people’s injuries.
What is Insurance
Insurance is a contract, represented by a policy, in which an individual or entity receives financial protection or reimbursement against losses from an insurance company.
Insurance policies are used to hedge against the risk of financial losses, both big and small, that may result from damage to the insured or her property, or from liability for damage or injury caused to a third party.
There is a multitude of different types of insurance policies available, but when it comes to outdoor events, there are some specific insurance policies you need to consider:
- #1 – Protection of you, your staff, and your business: When you start a business, this becomes the first insurance policy you consider outside of yourself or your family.
- #2 – Protection of volunteers, property, and day-of actions: Event insurance to protect you, your volunteers, your sponsors, and the property owner.
- #3 – Protection of your customers: Additional insurance that covers the racers if they are injured above and beyond their own coverage.
To get a good rate, your insurance agency will require that you show them:
- Your Liability Waiver
- Your Risk Management Plan (i.e. Emergency Response Plan)
In MOD Episode #28 — Mr. Murphy Loves Your Cut-and-Paste Waiver I told you why waivers are your first line of defense against personal injury lawsuits.
Additionally, in MOD Episode #14 — Mr. Murphy Just Took Out a Racer I told you why you need to take emergency response planning very seriously when — not if — you need to save a racer’s life.
This is where General Liability Insurance comes in.
Every business, even if home-based, needs to have liability insurance.
The policy provides both defense and damages if you, your employees or your events (which could be called a product or service) cause or are alleged to have caused Bodily Injury or Property Damage to a third party.
This is the insurance that covers what most business owners refer to as “slip-and-fall” lawsuits.
When it comes to endurance sports and outdoor events, slip-and-fall is a part of doing business.
Not everyone sues if they do happen to hurt themselves.
I often find that racers are a more hardy bunch and tend to think of injuries as a badge of honor.
But you never know when you are going to get that one person that thinks suing everyone for their own mistakes is perfectly acceptable behavior.
Sanctioning is a special kind of general liability insurance that covers association events for which a permit has been issued.
If you want to be an official event based on the rules and regulations governed by a national organization, then you have to play by their rules.
This means an official permit and a requirement to use their general liability insurance to cover your event.
Often, the insurance that comes with sanctioning is not super expensive.
However, it does require you to abide by their rules in course design, officiating, organization, and administration.
One of the biggest points of confusion that race directors have with insurance is how their racers will be protected during the race.
Most races are what is called “at your own risk” kind of events.
This means you — as a racer — understand that what you are about to do is dangerous (hopefully detailed in the waiver you have to sign) and that you — the racer — are responsible for yourself if you get hurt.
Each participant is then expected to have their own insurance coverage that kicks in if they hurt themselves during the race.
But the race director can provide additional insurance that covers the racers if they are injured above and beyond their own coverage.
This is almost always elective — the racer has to ask for it and pay for it — and can be part of your own insurance or the insurance provided through sanctioning.
Many national organizations provide general liability coverage for accidental medical coverage as part of their sanctioning package.
When you decide to host live events, you invite risk.
Mr. Murphy is the master of catching you without any kind of financial protection, and always at the worst time too.
Be aware of the different levels of insurance that you will need to navigate before you can safely produce an event.
Go talk to an insurance agent.
Heck, go talk to six insurance agents.
Get a ton of quotes, shop around, and find a policy that works for you.
Never, never, never direct an event without insurance — ever!
And Now You Know!
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