Appeals court relieves insurer of covering fatal drag racing crash

The 5th U.S. Circuit Court of Appeals on Friday relieved Kinsale Insurance Co. of defending the organizer of a drag racing event against suits over a fatal accident that occurred in October 2021.

The three-judge panel of the New Orleans-based court said in Kinsale Insurance Co. v. Flyin’ Diesel Performance & Offroad LLC et al. that a federal judge in Texas erred when finding that Kinsale’s commercial general liability policy was ambiguous, therefore requiring the insurer to provide a defense.

Three people, including two children, died when a 1990 Ford Mustang driven by a participant strayed from the raceway and collided with spectators during Race Wars 2 in Kerrville, Texas. Families of the injured and decedents sued Flyin’ Diesel, the event’s organizer, and others in Texas state court. Flyin’ Diesel tendered the suit to Kinsale, which agreed to provide a defense under a reservation of rights, court records show.

Kinsale’s policy included a motor vehicle endorsement that barred coverage for any claim or suit involving the operation, maintenance or use of any motorized vehicle.

Kinsale sued Flyin’ Diesel in federal court in San Antonio, seeking a declaration that it was not obligated to defend or indemnify the suits. The parties filed competing motions for summary judgment, and the trial judge agreed with Flyin’ Diesel that the policy was ambiguous.

The appeals court reversed, ruling that Flyin’ Diesel was isolating portions of the policy to find ambiguity.

Representatives for the parties did not respond to requests for comment.