Everyone loves to watch a spectacular shot. It could be a hole in one in golf, a half-court shot in basketball or a blue-line goal in hockey. But if you are the event organizer or promoter, you may find yourself shilling out some cash for a prize after these awe-inspiring moments.
When you have prize insurance, you don't have to feel that way. You can celebrate right along with the winner. Hole in one insurance pays the prize money to the winner, and as the insured you only pay a fraction of the payout for your insurance premium.
An independent agent can help you compare multiple contest prize insurance companies and specific event coverages to find the insurance that fits your event or contest. Find an agent now to get a quote on contest insurance.
Odds of Golfers with Varying Skill Levels Making a Hole in One
- Odds of a PGA Tour golfer making a hole in one: 1 in 3,000
- Odds of a single-digit handicap golfer making a hole in one: 1 in 5,000
- Odds of an average golfer making a hole in one: 1 in 12,000
How Prize Insurance and Hole in One Insurance Work
Every good promoter knows that if you want to get people excited about an event, you have to create some buzz. Many times, the best way to ramp up the energy level of the crowd is to offer a prize, such as a bundle of cash, that participants have an opportunity to win during the event.
Hole in one insurance began growing in popularity in the 1980s as golf tournaments started awarding cash or other prizes to contestants who made a hole in one during the tournament.
Since then, this marketing idea has expanded to other sports. Basketball events added half-court shot contests, hockey events sponsored blue-line goal contests and golf event coordinators added long putt contests.
What you may not know is most sponsors or promoters of these events do not pay these winnings out of money set aside for the contest. Instead they purchase prize indemnity insurance or putting contest insurance to cover the possibility that they will need to award these prizes.
What Is Prize Indemnity Insurance?
If you offer a grand prize at an event, you may need prize indemnity or indemnification insurance. This coverage, which is often referred to as hole in one insurance for golf events, pays an indemnity to the insurer of a contest if a participant wins a prize.
For example, if you are the golf contest sponsor, and you offer $10,000 for a hole-in-one on hole 17, your insurance company reimburses you the $10,000 you have to pay out if a participant makes the shot.
As with any other insurance coverage, prize indemnity insurance provides compensation – an indemnity – when the insured suffers a loss.
In this case, your loss would be the value of the $10,000 cash prize awarded to the prize winner. So your prize indemnification policy’s coverage limit is the cash value of the prize or prizes your contest offers.
In addition to the cash value of the prize, you and the insurance company have to work out various guidelines for the contest.
For example, you need to decide the number of holes included in the contest, the means for proving the winner made the hole-in-one and whether or not to offer a consolation prize if a golfer aces another hole not included in the contest.
Who Needs Contest Prize Insurance?
Even though this type of insuance is often called hole in one insurance, it can cover almost any type of contest that offers a large prize. As long as as there are odds involved, your contest can gain protection from losses by utilizing prize insurance.
Examples of organizations and events that may need contest prize insurance include:
- A professional basketball team that promotes a free throw shooting contest
- A minor league baseball team that has a home run hitting contest
- A high school football team that has a field goal kicking contest.
- A company that sponsors a contest for picking the Final Four during March Madness
- A television game show that wants protection from paying prizes in excess of a specific amount
- A local radio station that awards a prize for guessing the name of a series of songs
How Do Insurers Set Prize Insurance Cost?
Prizes come in all sizes, as do sporting, spectator and participant events and the organizations that promote them. For this reason, the price for these prize insurance policies varies widely.
There are so many considerations for each event, but some of the things insurers will examine include:
- The difficulty of your contest
- The ability of the participants
- The number of contestants
- The value of the prizes or cash award
Another variable is that prize insurance companies each have their own methods for determining premium costs. Be sure to work with an independent agent who can help you compare hole in one prize insurance rates from several insurers.
Cover Your Prize for a Fraction of Its Value
A contest prize insurance policy makes a lot of sense if you are awarding a large amount of cash for a contest where the odds are in your favor. You can create attention for your event by offering a high value prize and insuring it with a prize indemnity insurance policy that costs much less.
Contact an independent agent and find hole in one insurance or prize insurance to insure your unique contest for a fraction of the cost of the prize.