LUCERNE VALLEY, Calif.—A federal agency launched an investigation last week into an off-road racing event that featured a horrifying crash that killed eight people and injured at least a dozen others.

The Aug. 14 crash took place during the California 200, an off-road race staged outside Lucerne Valley in the Mojave Desert just east of the San Bernardino Mountains. The race is sanctioned by Mojave Desert Racing Productions as part of a seven-race circuit.

The incident put off-road racing in the crosshairs of federal safety investigators. Such races are popular in California, Arizona and Nevada.

The Bureau of Land Management, part of the U.S. Department of the Interior, which administers public land where the races often are held, is conducting a full-scale investigation into the incident and is cooperating with state and local law enforcement agencies. The federal agency last week suspended all future events by South El Monte, Calif.-based MDR.

An e-mail and phone calls to MDR were not returned. In an unsigned website posting, MDR said “we were shocked and saddened by the tragedy” and offered “sincere condolences and prayers to all those affected.”

The spectators were killed during the 200-mile race made up of 50-mile circuits when an off-road truck driven by Brett M. Sloppy, 28, took a jump called the “rockpile” at an estimated 40 to 50 mph, hit the brakes on landing and rolled the truck into spectators just feet from the course, which had no spectator barriers.

No charges were filed against Mr. Sloppy.

According to the Bureau of Land Management, the event permit required MDR to provide a safe environment for 60 to 80 participants and 200 to 300 spectators. In a statement, the agency said “the permittee is responsible for the safety of participants and spectators at the event with respect to the race/event course...all persons involved in and all spectators of this event are to travel 15 mph or less when passing within 50 feet of any social group.”

It also said MDR was responsible for providing a first aid coordinator.

MDR's own rules require that spectators not be within 100 feet of speeding vehicles. However, video shows fans within what appears to be as close as 10 feet from the course with vehicles speeding by.

Lori Shaw, Charlotte, N.C.-based director of Aon Risk Solutions' entertainment practice, said individual race teams, the facility and sanctioning bodies of the race typically all purchase insurance for an event. She also said an event permit usually requires evidence of general liability coverage from the event organizer and permit holder at specific limits, which may include excess liability, workers compensation and auto.

MDR reportedly was involved in a similar incident 12 years ago, when it was sued for negligence. MDR paid $145,000 in 2001 to settle a case with a spectator after a racer hit him in 1998 during an off-road race near Barstow, Calif. The victim reportedly suffered multiple fractures and a heart attack.