Board Agenda Item: Future of DMS Racing Group Project

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That was not based on anything in writing in policy documents and predates our current policy. If we are under some kind of blanket prohibition of certain topics there are some people who should probably be made aware of that.

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I do remember us saying we couldnā€™t have brake classes under our old policy. But now we are under a better policy that should enable us to teach them.

Iā€™m not going to try and remember the specific wording, it would probably be picked apart for having a typo.

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If Iā€™m not mistaken, DMS has a lawyer on retainer for answering precisely these sorts of questions.

We have expert advice available: use it :slight_smile:

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And if they arent good enough to trust their answers then
why are we paying them?

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why would I ask our lawyer first if someone knows already? I went to our insurance agent to see if we were covered. We will need to purchase race day insurance when itā€™s close to the next race.

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Again Kris what are you worried about insuring?
What specific type of incidents?

https://www.kandkinsurance.com/Motorsports/Pages/Racing-Owners-Sponsors.aspx

Take a look at the link above. This would be an example.

That does not show any details.

I am asking what problem is trying to be solved.

Insurance is just a side bet that something could happen. That being said there are going to be a ton of exceptions.

What exactly are you worried about?

Letā€™s try thisā€¦

I am worried about someone getting killed in the various lathes around the building.
I am worried about unsafe practices around the lift.
I am worried about people using the woodshop that are not follow and listening to safety advice.
I am worried about people that use gloves on rotational devices loosing a hand.
I am worried about someone breaking the Haas by slamming the spindle and the 20K bill that comes after it.
I am worried about an oxygen tankā€™s regulator catching on fire AGAIN (This has largely been stopped)
I am worried about trip and fall accidents from the amount of electrical wire and air lines that are on the floor.
I am worried about people that are not wearing safety glasses in the shop areas and someone loosing an eye.

But I can personally say I have never been worried about someone getting hit with a tire at lemons race. This is not Nascar we are talking about there are no spectators around most of the track.

So what exactly are you worried about?

MSR Houston

Motor Sport Ranch

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Thatā€™s true, but nearly every decision we make could accurately be described as a bet. Itā€™s certainly true that you can never eliminate risk, but its also true, that it would be irresponsible not to address and mitigate obvious risks.

A significant and obvious risk which could easily force DMS into liquidation (death). Again, weā€™re talking about a high-risk sport, so a discussion about mitigating risk is just an obvious and responsible thing to do.

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Yes Robert, I am aware that the possibility of something happening is very small. But to make sure DMS and the driver are protected in case of an accident (maybe as an example the driver lost control for a mechanical reason and slammed into several bystanders killing them) insurance for this exists. This is what insurance is for, in case of a small possibility of something going wrong. If you would like to know more about how insurance works Iā€™m sure I can find some resources for you to read.

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Brian I am right there with you but again these policyā€™s are not designed to insure the drivers health.

They will keep DMS operational if we are sued.

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Every track and racing league carry insurance. Not sure what it covers though. Every spectator entering race event sign waver at the gate. So do all drivers.

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I want to add a real life scenario to Marshallā€™s point about ā€œsomebody has to payā€.

I have friend who owns a handyman service in Plano. All of his craftsman are 1099 subcontracted labor. Most of these guys and gals donā€™t carry insurance, though they should. My friend has a 5 million dollar liability policy. He had a craftsman on a job that had a ceiling repair. This guy had been up and down ladders most of his life. He typically would go up and down holding tools and not holding on to the ladder (which, in and of itself, is dangerous and personally neglectful). On this job, he didnā€™t move any furniture out of the way to make the area safer either. As he was going down the ladder, he missed a step falling head first to a hardwood floor. The coffee table that he didnā€™t move out of the way had sharp 90 degree corners. He hit his head on the temple region of that corner of the coffee table and bled out and died within minutes. His family got a lawyer and sued the homeowner and the handyman. The lawyer also called OSHA. The homeowner got a lawyer and sued the handyman business too in order to protect themselves from the craftsmans family lawsuit. My friend had all kinds of waivers in place for his subcontracted labor. He felt he was covered and had no liability. Itā€™s was looking like it was going to court. The OSHA investigator initially sited my friend for not creating a safety program around proper use of a ladder. His lawyer successfully countered that no safety program was needed since the craftsman are not employees. The OSHA agent then called a meeting with all parties attorneys, plaintiffs, homeowner and handyman and handymans insurance rep. Basically, what he told my buddies lawyer was that someone died and therefore, someone will have to pay. He agreed that the handyman was perhaps not responsible but that if a jury was to be called he would lose and have to pay not only an amount that would be determined by the plaintiffs lawyer and the jury plus court costs, etcā€¦ This is what the lawyer and OSHA threatened him with. My buddies lawyer and him met to discuss and his lawyer basically agreed that it was too risky for court and that he felt he would lose too. So they decided to offer a settlement to all parties. So after discussing it over with everybodies lawyers and their clients, they all agreed that everybody would drop their lawsuits if my friend would come to a settlement with the craftsmans family.

Bottomline, the waivers were probably worthless and the risk to my friend going to court and possibly spending 50k or more with no guarantees, was just not a smart move. He decided he would rather give the money to the family than to courts and lawyers. He made it all go away with a cash settlement. He had the deep pockets and he had to pay. Just the risks of doing business in this current environment. IMO, DMS would most likely have to pay no matter what. Itā€™s good to have policies in place that can cover a payout if possible, but the waivers are probably useless. Probably more of a peace of mind, than effective in court. I think a well thought out and planned insurance strategy should be more important. Important to find an insurance carrier/rep that can really come up with a quality plan and strategy for all the activities that DMS is apart of, if possible.

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I am glad that we are requiring training on a lot of tools and the eventually
we will have RFID readers on them, Those things would Help in case of an
accident, But we do need to see what we do with insurance to cover us

What is bad is that the with the current legal system a lot of folks settle bad
cases, because the risk of not settling is so great. Folks need a right to sue, but there
is a need for changes, until that there is insurance

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Not to be Debbie Downer, but this probably applies to the ā€œtour waiversā€ we use.

DMS really needs to be protected by a LLC. There are too many things in the building that can kill or maim.

Where do I get my $0.02 receipt?

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DMS is already incorporated, and since there are no owners, weā€™re better protected than an LLC would offer. But regardless of organization type, our assets can be taken if we lose a suit - that means cash and tools.

Basically, any judgement over $150-$200K, and weā€™d have to liquidate and close the doors.

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