Could Track Days and Test Days be at risk?

8th June 2016

Most of us are familiar with the implications of the Vnuk ruling – but if not, there has been a few recent developments which Andy Hancock from Grove & Dean Motorsport Insurance explains.


On 4th September 2014, the Court of Justice of the European Union ruled on a case Damijan Vnuk v Zavarovalnica Triglavon on behalf of the Slovenian Supreme Court. The EU ruled in favour of the plaintive (Mr Vnuk) who was claiming compensation after being involved in an accident; having fallen off a ladder hit by a tractor and trailer during the stacking of hay bales in a barn – the case initially being dismissed by Slovenian courts due to the incident taking place on private land.  The EU over-ruled, deciding that the concept of a vehicle was the issue – not where & when it was being used.

The implication of the EU ruling is that compulsory motor insurance may now extend to “any use of a motor vehicle consistent with the normal function of the vehicle and anywhere”, it will no longer be limited to being used on a road or public place. This definition dragging into consideration motorsport / race cars, as they very much fell under the definition of “motor vehicle intended for travel on the land & propelled by mechanical power”.  Other industries affected, apart from the Motorsport Industry, being Agriculture, Construction & Fairgrounds.

The first battle has been won, but victory has not yet quite been achieved

So in summary race cars would need to have compulsory third party liability cover for damages to the driver / vehicles – as we know it’s not currently compulsory to even have insurance on your race car, and in any case, the cover provided by UK Insurers specifically excludes third party injury & damage claims. You only have to look at the incredibly low number of Brokers & Insurers who operate in this niche market currently (and indeed who have done so in the past 30 years) – it’s a very difficult area to make an Underwriting profit in, and with (GT/LMP) race cars getting more and more expensive, and Gentleman AM drivers insuring themselves for higher & higher values, obtaining the Underwriting margin/advantage for Insurers becomes even more difficult.  From Grove & Dean Motorsport Insurance point of view, our Insurer currently likes the “short tail” on motorsport claims – you can set a Policy up on a Friday, have an accident on a Saturday, report and settle on the Monday – there are no third party injury claims that need “reserving” as per their Private Car Insurance book of business (some of these injury claims can go on for years and pay-outs exceed £1m).

If insurance became compulsory on all motorsport vehicles, aside from the practicalities of how this would work – can you imagine how many incidents would have to be reported to Insurers from a typical BTCC race weekend!! Not to mention Banger Racing!! – it is likely that UK Insurers would not be willing to offer the required levels of third party cover, or if they did, the premiums would be prohibitively high, making most motorsport events/Championships unviable.      


On the face of it, the outlook looked bleak . . . . until the Motorsport Industry Association (MIA), the MSA, the circuits and the British Insurance Brokers Association (BIBA) stirred into action, and for the past 12 months much lobbying of the EU and various Motorsport Federations/circuits around Europe has taken place.  With a £25 billion turnover industry and 100,000 jobs in the UK alone at stake, it was imperative that the newly formed Vnuk Industry Action Group (VIAG) lobbied the EU Commission to make changes to the Directive – for instance getting motorsport removed from the list of vehicle uses being a good result.  VIAG met with EU Commissioner, Lord Hill in March 2016, to present the economic necessity of exempting motorsport from the Vnuk Directive – the next step being to gain agreement from the EU Commission, through the issue of a “Roadmap”,  that the activity of Motorsport will be excluded from the ruling.

On the 8th June we have finally heard from the EU Commission via an EU Roadmap (which puts the Directive into the public domain), that their intention IS to remove the activity of motorsport from the Directive, together with Agriculture, Construction & Fairgrounds vehicles – the intention being that the Directive should be limited to the use of vehicles in the context of traffic  e.g. on the road. This is obviously very good news – but the fight isn’t quite over yet.  The amended Directive will now get re-presented to the EU Parliament & the EU Council and it MUST have majority support from all EU Member states, and once published, from MEP’s. Only then will the amended legislation be passed, EU law amended, and UK law unaffected. 

The first battle has been won, but victory has not yet quite been achieved – many in the Industry are working hard to make this happen & to ensure the best result for everyone connected with Motorsport in the UK – lobbying your local MEP (they may take some searching on Google!!) is key.  Let’s hope we achieve another great result soon and protect this fantastic Industry we should all be incredibly proud to be part of.


Motorsport Days – Track Days / Test Days