November 30, 2018

Motorsports Team Sponsorship

The motorsports circuit has been racing its way toward becoming one of biggest sports in the world thanks, in no small part, to Formula 1 and NASCAR. Just last year, the circuit’s total global spending was expected to reach $5.75 billion. Companies looking to market their brand have developed sponsorships with racing teams. Drivers and cars showcasing the companies’ logo can be leveraged to promote to a large, often international, audience. The sponsor and the race team become one, and it is important to be aware of the possible risk a merger like this can create.

Risk Awareness

When dealing with race cars driving over 200 miles per hour in a circle, the risk potential is always high. Within the last decade, there have been many notable deaths due to auto racing and roughly 645 total since the sport began. Tragic accidents can lead to a chain reaction of damages, affecting everyone on a team, including the sponsors. For example, if a driver ends up in a crash that injures others, the sponsor could be held liable because their logo is prominently displayed. The type of insurance that racetracks might provide for sponsors may not offer truly comprehensive coverage for them. However, a sponsor could purchase specialized insurance coverage to help keep their brand protected, should someone file this type of lawsuit against them.

Owners and Sponsors Liability Insurance

In order to offset the costly expenses that accumulate when handling a lawsuit, it is important for a company to have Owners and Sponsors Liability Insurance. This is an effective way to ensure that a sponsor’s brand remains fully covered in the event of an accident. ProSight offers coverage specifically for owners and sponsors:

  • Comprehensive General Liability comprised of:
    • Products and Completed Operations – Covers bodily injury losses resulting from the sale of track products up to a $2,000,000 aggregate limit.
    • Personal and Advertising Injury – Covers false arrest, libel, slander, wrongful eviction and privacy.
    • Damage to Premises Rented to You – Helps cover damage to a rented premises.
  • Errors and Omissions – Helps protect against allegations of a breach of duty in conducting the event.
  • Participant Legal Liability – Provides bodily injury and property damage coverage to certain event participants.
  • Optional Increased Liability Limits – Liability limits up to $5,000,000 are available for an additional premium for each approved track.

 

Having this type of specialized insurance is valuable not only to owners and sponsors, but race teams as well. When looking to obtain sponsorship, having Owners & Sponsors Liability already in place may help teams in attracting companies looking to invest. That’s how sponsorships and race teams grab the checkered flag together.

-Dexter Alcedo, Customer Segment Executive for Motorsports and Live Media

Disclaimer: Policies described above are underwritten by the insurers of ProSight Specialty Insurance Group, which include NY Marine and Gen. Ins. Co., Gotham Ins. Co. and SW Marine and Gen. Ins. Co. Coverage may not be available in all jurisdictions. Actual coverage is specified in the policies issued. ProSight Specialty, 412 Mt. Kemble Ave., Morristown, NJ.

 

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