When motorbike track operator, Chris, faced a personal injury claim, he went to his insurers who told him his policy didn't cover events. But what did they mean by 'event'?
What happened
Chris ran a business, operating a motorcyle track where people could ride their motorbikes. When a rider was injured in an accident, he made a claim against Chris for personal injury.
Chris went to his insurers to get cover from his public liability insurance. The insurers declined the claim, telling him his policy didn't cover events. They pointed him to an exclusion in the policy terms for liability relating “to any person while participating in, or practising for, any event controlled, organised, sponsored or supervised by the insured”.
Chris explained he didn’t organise events, just allowed people to practise on the circuit. The insurers said the word ‘event’ could be defined as any use of the circuit.
What we said
The term ‘event’ wasn’t defined in the policy. So we gave some consideration to whether the wording in the policy was clear. We felt that ‘event’ implied something Chris had organised, such as a race or a specific event where riders are taking part together.
Chris didn’t run events. He provided a service and facility where people could pay to ride their motorbikes around a circuit. They weren’t taking part in any kind of race or competition.
Furthermore, when Chris had taken out the policy, the insurers had requested information about the use of the track. They’d asked about the types of vehicles the track was for, whether riders wore protective clothing, and what steps would be taken to avoid injury. We couldn’t see why the insurer needed this information if they weren’t providing cover for using the track.
Finally, the way the insurers had applied the policy exclusion significantly reduced Chris’s cover and potentially rendered the policy meaningless.
We said the insurers should have made it clear that they would apply the policy term in the way they had. Only then could customers like Chris make an informed decision on whether the cover met their requirements.
And, if the insurer intended ‘event’ to be defined in a particular way, they should have defined it in the policy document by defining it. For those reasons, we upheld the complaint.
However, the injured rider had started a court claim against Chris, who had had to instruct solicitors.
Because of that, we asked the insurers to cover the claim going forward – subject to the claim satisfying the remaining policy terms and conditions. We also told them to reimburse what Chris had spent on legal fees to date with 8% simple interest.