Let me begin with an introduction. My name is Eric Odle and I am a licensed Farmers Insurance Agent specializing in commercial insurance and financial services for 8 years. I recently brokered the agreement for the AFM’s new general liability and excess liability insurance policy. In the past 6 seasons of attending AFM events I have had the opportunity and pleasure to become acquainted with some of you. To quote Bilbo Baggins: “I don’t know half of you half as well as I should like…and I like less than half of you half as well as you deserve.”
I have been made aware of some insurance concerns and I would like to take this opportunity to address them but will limit my comments to that arena.
After reviewing AFM & BARF threads it is clear to me that all of the questions and concerns can be broken down into 6 categories:
1) Relationships
2) Risk
3) Coverage(s) and requirements
4) Cost
5) Options
6) Timing
1) RELATIONSHIPS:
In my years within the motorcycle and racing communities I have developed friendships with many and conducted business with some of you. In fact, of the many clients and over 5,000 policies that I am responsible to, the vast majority have come from referrals, which is a common business practice. I am the insurance agent for Zoom Zoom Events. Nothing I do for AFM benefits Z2 and vise versa. Both are simply clients I serve. There is no conflict of interest.
I was contacted by the Race Director for the AFM whom I am told has dealt with the club’s insurance needs for at least two decades. She asked if I could find a policy that met the requirements that the AFM is facing for 2009 going forward for GL, excess liability and participant accident/excess medical. I was informed the current carrier was not willing to insure the club to the limits that the tracks are now requiring; oh and by the way, racers under the age of 16 were now in the mix. I secured a proposal and presented it back to the race director.
2) RISKS:
Some of you may not have made the connection between the insurance industry’s requirements and recent developments across the country in specialized markets. Motorcycle racing is a specialized market. A recent example involves a disassociated mother that claimed she did not know her ex-husband was allowing their son to race, the boy tragically died during a race and the mother sued. Ask ANY insurance agent, if you want to see what’s possible in our industry just look to California, Texas and Florida. In today’s climate the club faces significant exposure if the correct coverage is not in place.
It has been suggested by some that “other clubs are not requiring vendor/minor coverage, why is the AFM?” This is difficult to address because without seeing the actual policy/bind requirements it is just hearsay. In any case, because other entities may be functioning in a “loosey-goosey” fashion does not remove what could be significant exposure for the AFM. Proper coverage and the due diligence of the Board only serve to protect the long term viability and future of the club. The insurance coverage covers the club’s tangible assets and to some degree intangible benefits as well as being the responsible thing to do. This preserves the privilege to continue racing. Believe me, any uninsured vendor is an unnecessary risk for the club. There have been literally thousands of lawsuits and claims across multiple venues involving contractors and vendors at events put on by an organizer. Motorcycle racing is a sliver of the sum total of events and underwriters aren’t going to conduct laser surgery to cut out this industry and make special exemptions when exposure still exists even if it is not frequently encountered.
3) COVERAGES & REQUIREMENTS:
A standard bind requirement for the new policy was that any approved vendors for the AFM must provide a certificate of insurance (proving they have coverage) and naming the AFM as an additional insured. Please understand that the carrier in no way meant to “punish” anyone with this requirement as has been suggested by some, they are merely looking out for the best interests of the AFM. It has also been suggested that the vendors are victims as a result of bringing the under-16 year olds into the fold. This is incorrect. The fact that the carrier is requiring certificates from the vendors has nothing to do with the under-16 year olds. Requiring the vendors to carry their own coverage and name the AFM is simply a necessary step to further insulate the club.
4) COSTS:
The Race Director indicated that the GL and excess looked great however the carrier I was working with was considerably higher on the PA/excess medical. I was very interested in helping the club out in any way that I could and after some discussions was able to get my underwriters to agree to split the policy and underwrite ONLY the GL and excess liability so the club could stay with its current carrier for the PA/excess medical. I was very pleased with this arrangement as it is not at all common for a carrier to do this as they were walking away from 80% of the premium. I presented the revised proposal to Barbara, she presented to the board and she then accepted for the club. It has been suggested that the new requirements are putting an undue stress on some of the vendors. In fact one of the vendors stated that he contacted 7 different insurers and was not able to find anything under $8K, I am not sure who he has been talking to but prior to him making such a big deal about not wanting to associate with the AFM any longer I was able to secure him a quote for $490.32 for an annual policy that covers him even outside of the AFM. The other vendors that I have been working with have varying specialties but suffice to say that none of them have come in over $3K and I am still researching other markets. The majority of vendors have already secured what is needed and have already commented on the ease for some in doing so.
5) OPTIONS:
Some recommendations/suggestions have come up in the posts on both forums. This input is a matter that is best addressed by the board on a case by case basis. As one of my clients I’m happy to advise them on insurance related matters that may spawn from suggestions.
6) TIMING:
This topic has been covered in great detail in previous posts, suffice to say the coverage(s) needed to address the current needs of the club were put in place as quickly as humanly possible. I was contacted in late February. There were time constraints involved.
In closing let me just add that it has been indicated to me by the Race Director that the policy that was designed to address the current issues of the AFM for 2009 and going forward do so at a savings to the club, as she is able to eliminate multiple other policies, and it also provides greater coverage. It has been suggested in these forums that I have “thrown the AFM under the bus” by “allowing” what really amounts to common sense verbiage to be in the bind requirements. So if finding better coverage for the club at a cost savings to the club is “throwing you under the bus” then I must stand guilty as charged.
It has also been suggested that I “cashed a nice commission check for the new policy”. Make no mistake, as commercial policies go, the policy for the AFM is very small and if it were not for the fact that it IS the AFM I would have delegated this to one of my staff in my office. The amount of man hours and reinvestment that I am dedicating back into the club makes this very much a negative return policy from a monetary standpoint.
for the AFM IMHO