People love free stuff, especially if they win it by making an impossible shot or accomplishing another impressive feat with the odds stacked against them. Only the company or team giving away those expensive prizes don’t enjoy it nearly as much, at least not without the proper coverage. Fortunately there’s hole-in-one prize insurance for these occasions, to help everyone feel like a winner.
What Is Hole-in-One Prize Insurance?
Also called prize indemnity insurance, hole-in-one insurance is designed to reimburse companies/teams/etc. who hold special events or tournaments where a big expensive prize is offered. Though the odds of winning may be greatly stacked against the players, the company advertising the prize still stands to lose a ton of cash if someone actually hits the target, lands the shot, etc., and collects their promised reward.
The actual company or team holding the contest isn’t the entity that pays out for the value of the grand prize offered. Instead, the contest holder purchases a type of coverage known as prize indemnity insurance to fund the value of the prize, should someone make a surprising victory. That way, the winner gets their prize and the contest holder doesn’t go bankrupt. Basically, everybody’s happy.
How Does Hole-in-One Prize Insurance Work?
In order to draw in huge crowds and gain awesome publicity, sports teams, event venues, and retailers sometimes offer various ginormous prizes to the winner of a seemingly impossible contest, such as scoring a hole in one during a golf tournament or a half-court shot during a basketball game. Prizes can range from free cars to vacations to big ol’ stacks of cash.
No matter the type of prize offered, the party giving it away stands to take a huge financial hit should they have to pay up. That’s where prize indemnity insurance kicks in. If your company/team is forced to cough up the goods, your insurance coverage will reimburse you for the value of the prize. So, if you give away a $20,000 car, you’ll get that $20,000 back. Seems like a win-win situation.
Who Needs Prize Indemnity Insurance?
Pretty much any team, company, venue, or other platform offering a big-ticket item as a grand prize for winning some type of contest needs prize indemnity insurance. If you stand to lose a big chunk of change from someone claiming the prize you offer, it more than pays to have coverage.
Prize indemnity insurance comes in handy for the following scenarios:
- Golf tournaments offering cash prizes for scoring a hole in one
- Radio station contests offering a free vacation for being a certain numbered caller to correctly answer a trivia question
- Sports events giving away free cars to lucky audience members in specific seats
- TV game shows offering prizes in excess of a certain amount
- Retail stores offering free merchandise for being a certain numbered visitor
Regardless of who you are or what your contest is, odds are good that you’ll feel the impact of giving away a several-thousand-dollar prize. Hole-in-one insurance exists to help these fun promotions and contests to continue without pushing the prize giver into financial ruin.
How Much Does Prize Indemnity Insurance Cost?
Here’s the coolest part. Prize indemnity insurance premiums are typically cheap, regardless of the value of the prize being covered. Due to the low odds of someone actually winning such a contest, the insurance company doesn’t consider it much of a risk to offer coverage, and therefore offers the premium at a lower rate. Certain policies offer $1 million hole-in-one coverage for as low as $300.
The exact price of your coverage will depend on a number of things, like:
- How many people enter your contest
- The odds of winning your contest
- The cash value of the prize being offered
- The skill level of the participants entering
- If your company has run this kind of contest before
Before coverage is offered, your company or team and the insurance company will need to work out the contest’s guidelines. You’ll go over all the rules and other details, and decide on important things like potential consolation prizes. Once you and your insurance company reach an agreement on how everything will go down, you’ll be able to secure a certain amount of coverage for an agreed premium.
How Do I Get Prize Indemnity Insurance?
For the more obscure/less common types of insurance coverage out there, you might not be able to find what you’re looking for just anywhere. While our independent insurance agents may not be able to provide you with this kind of coverage directly, we’re happy to connect you with other local agents who can answer all your questions and even point you in the right direction to get the coverage you need and deserve.
TrustedChoice.com Article | Reviewed by Paul Martin
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