Marine insurance policies can impose various conditions and restrictions on the use of vessels, based on a boat owner’s needs and budget. These could include the geographic region in which a vessel is used or the time of year during which a vessel is used. For obvious reasons, policies can differentiate between commercial use and recreational use. Then it’s probably little wonder that activities involving speed contests, races, or stunts might be excluded from some insurance policies.
Let’s take a closer look at an interesting case involving this very issue of an insurance exclusion related to “racing.” The matter was heard in the United States District Court for the Eastern District of Louisiana. An insurance company denied coverage for an injury that was tied to the activity of “racing.” Mind you, the “racing” activity here did not involve overpowered rocket sleds like the insane designs driven by Gar Wood in the 1930s that squeezed four V-12 Packard aircraft engines into a hull barely 40 feet in length. Instead, the racing activity at the heart of this case involved a regatta for Optimists. Optimist prams are great boats, and a good way for kids to develop competitive racing skills on a forgiving platform. But pushing to their limits, 8-foot prams with 35 square feet of sail area hardly seem the stuff of dangerous race settings.
However, the injury in this case did not arise on an Optimist pram in the course of racing. The connection to “racing” here was created by someone giving a race official a ride in a powerboat to their official position. It sounds like it was a ride to a committee boat. The powerboat owner accelerated, and this caused it to leave the water and become nearly vertical before slamming back down. Although this took place on the waters of Lake Pontchartrain, it sounds terrifying, like something out of the world of offshore powerboat racing with hard-charging deep-vee Cigarettes and Formulas pushed to their limits.
The race official being driven suffered a fracture of her tibial plateau (upper flat surface of the shin bone). She and her husband sued the powerboat operator and other parties for damages under general maritime law and Louisiana law, one of the theories involved being negligence of the powerboat operator.
The exclusionary clause about “racing” was raised as a defense in the proceedings, but the court referred to case law holding that such clauses are strictly construed against the insurer, and any ambiguity is construed in favor of the insured.” Garcia v. St. Bernard Par. Sch. Bd., 576 So. 2d 975, 976 (La. 1991). This was good for the claimant and bad for the insurance carrier.
The carrier argued that its insurance policy should not cover injuries sustained in the accident because the exclusion ruled out bodily injury or property damage resulting from or sustained during practice or preparation for any one of the following activities: (1.) racing, (2.) stunting, (3.) speed contest, or (4.) demolition contest. However, the court saw things differently. The injuries from the powerboat’s violent “flight” were not directly sustained in any of these four categories.
But the carrier argued that the injuries were sustained during preparation for a racing event, since the passenger was injured in the course of being given a ride to serve her position in the regatta. And the regatta was an organized racing event, making her activity one of preparation for a race. It didn’t matter that an Optimist pram could hit dangerous blistering speeds of three knots in this race setting. The activity was “racing” for the policy.
The court decision goes on for a great length, dissecting every word of the exclusion. To make a long story short, the court ruled for the injured woman, looking at the context of the injury and essentially concluding that such an exclusion was meant to cover injuries more directly associated with racing.
Whether you’re racing in a regatta or racing home from work in rush hour traffic to enjoy some time with friends this weekend… have a safe and happy Labor Day holiday! Tim, Erol
Ref: Van Horn v. Chubb Ins. Co., Civil Action No. 17-12969 United States District Court for the Eastern District of Louisiana