Insurance Shortfall Won't Stop Grand Prix, L.B. Says

Times Staff Writer

For the second year in a row, the City Council has agreed to slash in half its requirement that the Grand Prix provide $20 million in liability insurance for the race, which is less than two weeks away.

The Long Beach Grand Prix Assn. asked for the reduction after finding itself in the "same dilemma" that threatened last year to put the brakes on the race: It cannot find the insurance the city was requiring, association president Christopher Pook said. "It's not a problem of having the money . . . it's just physically not there," Pook said.

Without the council's consent to lower the insurance requirement, promoters said they would have been forced to cancel the event. "I apologize to you for having to come before you again this year," Pook told the council, "but our backs are literally against the wall."

While agreeing to cut the insurance requirement from $20 million to $10 million, several council members told Pook that they want an earlier warning next time. The race is set for April 3-5, when Indy-type cars will race through downtown streets.

Last year, the council also agreed to cut the requirement by half less than two weeks before the race. Echoing sentiments expressed last year, Mayor Ernie Kell called the race "a good event for the city."

" It brings in a lot of people and a lot of jobs," Kell said.

Bud Huber, who ran unsuccessfully for a council seat last year, noted that another organization was denied a similar request last year. Huber told the council it should be consistent in its decisions. The council last year repeatedly denied a request by promoters of a gay pride parade to lower that group's $1-million liability insurance requirement.

In May, a Los Angeles Superior Court judge ruled that the city could not require the parade's sponsors to buy liability insurance, but said the city could require insurance pertaining to a festival held in a park conjunction with the parade. The city kept the $1-million insurance requirement on the festival if alcohol was to be sold. The sponsors said they could not get the coverage, and ended up not selling alcoholic beverages.

The obstacle facing both the Grand Prix and groups such as Lesbian and Gay Pride Inc. is a lack of available insurance. Pook said $10 million of coverage was the most any car race in the nation has been able to obtain.

Market Hasn't Improved

City Manager James C. Hankla said the insurance markets "have not measurably improved" since last year, despite passage of Proposition 51, which limits the damages that losing defendants have to pay in many civil cases to the actual amount of their fault, as fixed by a jury. Voters last year approved the so-called "deep pockets" initiative in hopes of putting a lid on skyrocketing insurance premiums.

The Grand Prix got "as good an insurance coverage as they can possibly get under the circumstances," Hankla said.

Promoters will pay $90,000 for $10 million in coverage, Long Beach Risk Manager Jim Hurst said Wednesday. This year's premium is about 24% higher than last year, Pook said. As it did last year, the race will buy its insurance from K & K Insurance Agency Inc. of Fort Wayne, Ind., a firm owned by Lincoln National Life Insurance Co., he said.

Pook said the three-day race is relatively risk free. During last year's race, he said there were two mishaps: a spectator hurt his ankle and a woman fell off a motor home.

Each concessionaire at the race is also required to provide $1 million in insurance, Pook said.

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