Simon, thank you for raising this. It is a very fair question and we have been asked a few times to clarify what we intend with this. The precise phrase we believe you are referring to is “Cosmetic damage or damage caused sliding the bike into a gravel trap”.
The "thrust" of the track day insurance product is crash damage. Unlike cars, bikes don't spin; they get dropped. This is part and parcel of being a biker. Dropping a bike and sliding gracefully along the track / into a gravel trap is NOT a “proper” crash (not that I am prepared to admit I would think this if separated from my steed at eye watering speed but then I don’t have the balls to be a biker either).
Years ago when we started insuring bikes on track days, we paid a number of very expensive claims from Ducati owners who had done nothing more than scratch the pretty bits in the gravel. The bike had not endured solid contact with anything and we decided to excluded claims that are simply “cosmetic” (principally caused by gravel rash).
It is more of a challenge for us to put the “thinking” behind a decision into a policy wording, but the thought process at this end was / is "... look mate, if you just drop your bike and slide into the gravel and make a claim then this is just, well... embarrassing. We want proper accidents; you know, accidents you can brag to your mates about in the pub”. A bit of gravel rash we regard as predictable wear and tear of taking a bike onto a circuit.
So, in practical terms what does this mean? If you drop the bike (or high side it) and the bike hits something and as a result bits get bent or badly damaged and some (or all) the bike ends up in the gravel, then that is all part of an “accident”. It is a crashed bike. We very happy to handle your claim - and listen to your story of life flashing before your eyes. If it's just dropped and scratched then this is simply wear and tear, you are a biker, pick yourself and the bike up, get back on. This is what bikers do.
If people are worried about the pretty bits then, either (1) take them off, (2) fit cheaper plastic ones or (3) pay more to insure them. Gravel rash in isolation is not a proper “crash” in our books.
To draw on your words to hopefully give you additional comfort here – if the bike is crashed and ends up in the gravel trap then we be happy to look at the damage as an “accident”. We do always recommend taking pictures of the bike at the track (BEFORE leaving the pit lane); this way it makes things clearer for the insurer’s loss adjuster.
Hopefully this helps a little further? We are incidentally reviewing the wording to try and make this clearer for all.