Which challenges did the motorsport industry face when the UK went into lockdown in March 2020?
In March 2020, all motorsport – from grass roots to F1 - came to a grinding halt when the first lockdown was introduced. Usually at this time of the year racing season would be in full swing.
In the UK, there are over 4,500 businesses involved within the motorsport sector, employing 45,000 people, and the entire industry was keen to see the sport up and running as soon as it was safe to do so and as restrictions allowed.
However, given that any failure to take reasonable safety precautions to reduce the spread of COVID-19 transmission at events has the potential to lead to outbreaks of the virus, as well as expose event stakeholders to liability claims - including rights holders, promoters, governing bodies, teams, drivers, riders, spectators, race officials and broadcasters, to name just a few - it was very important that the return of motorsport and transition to the ‘new normal’ environment was managed carefully.
Against the threat of COVID-19, it was clear that a detailed framework for the operation of motorsport during the pandemic needed to be implemented in order to strike a balance between enabling racing to take place and ensuring the health, safety and welfare of those involved in events.
What role did our team play in enabling the restart of motorsport to get underway?
To get motorsport back up and running during the pandemic, key industry stakeholders, along with the Government, joined their thinking together after the UK went into lockdown to establish a series of COVID-19 safety protocols to ensure British motorsport events would be able to operate in a COVID-secure manner.
Our team assisted in the process by providing motorsport insurance and risk management advice to our clients - ranging from competitors to promoters and suppliers – helping to assess the potential exposures, and ensuring that as far as possible their insurance was suitable or adapted to cover changes that would be made to the format of racing events.
Our team assisted in the process by providing insurance and risk management advice to our clients - ranging from competitors to promoters and suppliers – helping to assess the potential exposures, and ensuring that as far as possible their insurance was suitable or adapted to cover changes that would be made to the format of racing events.
What are the main ways in which motorsport has had to adapt in order to ensure racing events have been able to go ahead?
Up until May 2021, the majority of race events were held behind closed doors – with restrictions now allowing a limited number of spectators to attend.
To minimise the risk of a COVID-19 outbreak at events, bio-secure bubbles have been introduced - sanitised areas that can be accessed only by drivers, support staff and officials and broadcasting staff after testing negative for COVID-19. All staff remain within the confines of a bubble for the duration of the event and are screened and tested regularly for COVID-19. Clear information (briefings and signage, etc.) are provided on-site to outline the expected virus transmission mitigation measures that participants are expected to follow.
To limit the amount of people travelling to elite motorsport events, only select media are allowed on site to cover the event and the remaining members of press carry out interviews via teleconference, with drivers interviewed one-by-one during the pre-race build-up.
Have there been any new insurance or risk implications that have needed to be considered as a result of the pandemic?
With the industry back in a slightly different format, we needed to review our motorsport clients’ existing policies to ensure they had suitable cover in place for potential COVID-19 related eventualities and other possible pandemic situations in the future.
Although we are currently operating in challenging insurance market environment - where some cover is more difficult to find and premiums are rising - working closely and collaboratively with our insurer partners has meant that we have been able to ensure our clients can continue to access broad cover at an appropriate price.
As the pandemic evolves, we regularly reassess our clients’ cover to ensure it serves their individual needs.
Do you see there being lasting changes to the way the industry operates going forward?
The pandemic has meant that the industry has come back better, stronger and more resilient than ever before, having had to adjust to a unique set of circumstances over the past eighteen months.
One major change is the remote broadcasting of racing events - whereby live and non-live content is produced away from the host venue – which the media industry had to adapt to almost overnight following lockdown in March 2020. Thanks to ongoing advances in technology, the pandemic has demonstrated that racing events can now be covered by smaller teams of camera operators and on-site technicians, without the need for cumbersome equipment and hardware and large numbers of production staff – resulting in a reduction in travel, equipment and logistical costs.
The global motorsport industry has shown it is agile and able to react quickly to a rapidly changing landscape – which are great assets for future growth. One way it has demonstrated this adaptability is through the rise in popularity of esports – multiplayer video games played competitively for spectators, typically by professional gamers - which offer a way for a different audience to get involved in competitive motor racing, and appeal to a younger crowd.
Though motor racing first launched as an esport back in 2017, it really grew in popularity during the pandemic as a way of making the sport accessible to fans from one’s own home. Formula 1, Moto GP and NASCAR and others have run online events in recent months, which are broadcast to millions on TV or streaming services. We are even seeing prominent racers such as Max Verstappen and Lando Norris now counting among famous gamers.
Another way the industry is continuing to evolve is through green initiatives being launched by motorsports leaders – both on two and four wheels - to lessen the impact the sport has on the world around us. One of the series driving this change is Formula E - the world’s first all-electric international single-seater championship. Founded by FIA President Jean Todt and Spanish businessman Alejandro Agag. Formula E was launched in Beijing in 2014, and now with 11 teams and 22 drivers on the grid, it attracts global corporate sponsors, plus the world’s best motorsport teams and talent.
Extreme E is another of Agag’s radical new racing series, launched this year, which involves electric SUVs - sport utility vehicles - competing in extreme environments around the world, such as the Greenland ice cap, which have already been damaged or impacted by climate and environmental issues.
Plans are also in place to ensure F1 events become more environmentally-friendly - including using sea freight wherever feasible, and low-carbon fleets to travel from country to country or travel whilst in-country, as well as sequencing races in cities that are closer to each other.
As the motorsport industry moves forward, engaging the support of a specialist motorsport broker to advise and design fit-for-purpose motorsport insurance cover has never been more important.
This note is not intended to give legal or financial advice, and, accordingly, it should not be relied upon for such. It should not be regarded as a comprehensive statement of the law and/or market practice in this area. In preparing this note we have relied on information sourced from third parties and we make no claims as to the completeness or accuracy of the information contained herein. It reflects our understanding as at 11 August 2021, but you will recognise that matters concerning COVID-19 continue to develop and change across the world. You should not act upon information in this bulletin nor determine not to act, without first seeking specific legal and/or specialist advice. Our advice to our clients is as an insurance broker and is provided subject to specific terms and conditions, the terms of which take precedence over any representations in this document. No third party to whom this is passed can rely on it. We and our officers, employees or agents shall not be responsible for any loss whatsoever arising from the recipient’s reliance upon any information we provide herein and exclude liability for the content to fullest extent permitted by law. Should you require advice about your specific insurance arrangements or specific claim circumstances, please get in touch with your usual contact at Gallagher.