What are the chances of an amateur golfer shooting a hole-in-one? That is the concept behind price indemnification coverage. Hole-in-one insurance was a policy package that sponsors of a golf-tournament would take out to cover big-ticket prizes won by contestants who score holes in one.
A player who aces a par-3 hole during the tournament may get more than just prize coverage for the designated hole; he/ she may be awarded a car, cash, cruises, golf clubs, etc. Today, event organizers, promoters, or tournament hosts use hole-in-one to protect not only a tournament but charity games to avoid paying the premium or big payout.
How Grand Prize Coverage is Used by Events and Businesses
Unlike insuring your car or home against damage, indemnification insurance or grand price insurance helps you pay a premium as a way of eliminating the risk of paying for the entire prize if or when a contestant wins your competition or promotion.
In addition to influencing consumer behavior, grand prize insurance gives promoters the ability to increase or generate buzz around an event, boost sales, etc.; the kicker, it's all for a fraction of the associated cost of the grand prize.
Events Covered By Price Indemnity Coverage
Grand prize coverage is for any promoter or events organizer who has big promotional ideas but does not have the funds to host a crowd-pulling contest with high-value prizes.
Additionally, suppose you want to protect your event and give it a much-needed boost. In that case, this insurance covers the cost of marketing campaigns, contests, and most importantly, it allows promoters to offer large, risk-free prizes for a fraction of the cost.
Because price insurance is coverage for a promotion that gives contestants the chance to win prizes, a promoter only pays a premium to the insurance company that calculates the statistical odds of winning the prize, which then refunds the cash in the event a prize is won.
While price insurance rates are determined mainly by insurance underwriters, they also depend on the value of the prizes, level of difficulty, and the number of attempts needed to win the said prize.
Requirements for Prize Insurance Applications
Because prize insurance is very flexible, it's ideal for insuring just about any event or contest that can help raise money for charity. The information you need to have when setting up your hole-in-one insurance contract include;
- Your name, phone number, and email address
- Company name
- Detailed information on the event you wish to insure
- The correct tournament name (in case there are multiple contests on the day) and the date or dates of the event
How Coverage is Calculated
It can't be stressed enough how important it is to have the right people at your event, and every promoter or organizer has their ways of accomplishing this task. The fastest way to guarantee and create attention for your event is by holding a contest and giving away high-priced items.
A prize indemnity insurance company uses the following guidelines to set the premiums for the prize insurance;
- The actual value of the prize giveaways (with premiums of between 3 to 15% of the prize value)
- The likelihood of the event occurring, and
- The number of attempts contestants need to make to bag the prize.
Contact us for any questions and everything you need to know about prize indemnity coverage and what you need to ensure that your next charity event goes on without a hitch.