Prize indemnity insurance

Prize indemnity insurance

Prize indemnity insurance is indemnification insurance for a promotion in which the participants are offered the chance to win prizes. Instead of keeping cash reserves to cover large prizes, the promoter pays a premium to an insurance company, which then reimburses the insured should a prize be given away.

Hole-in-one insurance

One of the earliest and most common forms of prize indemnity insurance is hole-in-one insurance, which began to gain prominence during the early 1980s. [ [http://findarticles.com/p/articles/mi_qa3615/is_200005/ai_n8891564/pg_2 Do you want to make some money? Yes-is that your final answer? | Rough Notes | Find Articles at BNET.com ] ] Hole-in-one insurance, often purchased by a golf tournament host or sponsor, reimburses tournament organizers for the cost of awarding a hole-in-one prize in the event a tournament participant successfully hits a hole-in-one during the tournament.

According to the newspaper "USA Today", the odds of an amateur golfer hitting a hole in one are about 1 in 12,500. [ [http://www.usatoday.com/sports/golf/2006-07-16-hole-in-one_x.htm USATODAY.com - With holes in one, no matter how you slice them luck is vital ] ] These low odds allow golf tournaments to offer expensive prizes to golfers able to hit a hole-in-one during tournament play. In order to be able to afford such expensive prizes, tournament hosts can purchase prize indemnity coverage to protect themselves from having to pay for the prize from their own funds.

Typically, these hole-in-one contests operate as part of a marketing promotion. In many instances, golf tournament hosts will offer a hole-in-one prize to promote a tournament sponsor. For example, if a tournament is being sponsored by a car dealership, the tournament might offer a new car from that dealership as the prize for hitting a hole-in-one. The relationship between the tournament host and the sponsor is usually set up to provide advertising for the sponsor, prominently displaying the sponsor's name next to the prize during the tournament.

Companies that provide hole-in-one insurance may provide signs or other accessories to help the tournament host promote the hole-in-one prize. The insurance contract between the golf tournament and insurance company will detail rules such as: which holes on the course the prize will be insured on, how to verify the hole-in-one was achieved legitimately, and what to do if a contestant hits a hole-in-one on a hole other than the insured hole. Variables that affect the cost of the hole-in-one insurance include: the number of participants in the tournament, the skill of the participants (amateur vs. professional golfers), the length of the insured hole, and the value of the prize being offered.

Other prize indemnity insurance

In addition to hole-in-one insurance for golf events, prize indemnity insurance companies typically offer coverages for other types of contests as well. For example, contest coverage can frequently be purchased for contests such as half-court shots in basketball, field-goal kicks in football, home runs in baseball and blue-line goals in hockey. Such coverage is frequently purchased for contests at high-profile events such as the Super Bowl, World Series, NBA Finals, and many all-star games.

For example, in the 2005 Super Bowl, prizes were set to be awarded for several events, including a return of the opening kickoff for a touchdown, a safety, and a fourth-quarter field goal of 50 yards or more. Prize indemnity insurance was purchased to cover all these events. However, none of the events occurred in the game. [ [http://goliath.ecnext.com/coms2/gi_0199-3736632/Contests-popularity-increases-demand-for.html Contests' popularity increases demand for prize indemnity cover; Odds are, though, not all promotions can find insurance. Industry & Business Article - Research, News, Information, Contacts, Divisions, Subsidiaries, Business Associations ] ]

Most television game shows pay for prize indemnity insurance for million-dollar prizes. In 2008, such an insurance provider demanded RTL Group toughen million dollar win provisions after The Price Is Right $1,000,000 Spectacular ran off with three millionaires in six episodes, reducing the million-dollar win provision in the Showcase from $1,000 to $500. However, this would have only produced one less winner had it been used at the start of the series, as one of the two Showcase winners was within $500, and the other won her million in the Million Dollar Game.

References


Wikimedia Foundation. 2010.

Игры ⚽ Поможем написать курсовую

Look at other dictionaries:

  • Insurance — This article is about risk management. For Insurance (blackjack), see Blackjack. For Insurance run (baseball), see Insurance run. In law and economics, insurance is a form of risk management primarily used to hedge against the risk of a… …   Wikipedia

  • Marine insurance — Admiralty law History …   Wikipedia

  • The Price Is Right $1,000,000 Spectacular — infobox television show name = The Price Is Right $1,000,000 Spectacular caption = The Price Is Right $1,000,000 Spectacular logo from the 36th season (2008). format = Game Show runtime = 60 minutes (with commercials) creator = Bob Stewart… …   Wikipedia

  • US Hole In One — Infobox Company company name = US Hole In One foundation = Bryn Mawr, Pennsylvania, USA location city = Bryn Mawr, Pennsylvania location country = United States industry = Insurance Contests homepage = [http://www.holeinoneinsurance.com] US Hole… …   Wikipedia

  • Mick Luckhurst — Date of birth: March 31, 1958 (1958 03 31) (age 53) Place of birth: Redbourn, England Career information Position(s) …   Wikipedia

  • Australia — /aw strayl yeuh/, n. 1. a continent SE of Asia, between the Indian and the Pacific oceans. 18,438,824; 2,948,366 sq. mi. (7,636,270 sq. km). 2. Commonwealth of, a member of the Commonwealth of Nations, consisting of the federated states and… …   Universalium

  • Art intervention — An art intervention is an interaction with a previously existing artwork, audience or venue/space. It has the auspice of conceptual art and is commonly a form of performance art. It is associated with the Viennese Actionists, the Dada movement… …   Wikipedia

  • Archaeology — For the magazine about archaeology, see Archaeology (magazine). Excavations at the site of Gran Dolina, in the Atapuerca Mountains, Spain, 2008 Archaeology, or archeology[1] (from Greek ἀρχαιολογία, archaiologia …   Wikipedia

  • Germany — /jerr meuh nee/, n. a republic in central Europe: after World War II divided into four zones, British, French, U.S., and Soviet, and in 1949 into East Germany and West Germany; East and West Germany were reunited in 1990. 84,068,216; 137,852 sq.… …   Universalium

  • List of Acts of Parliament of the Great Britain Parliament, 1780-1800 — This is an incomplete list of Acts of the Parliament of Great Britain for the years 1780 1800. For acts passed prior to 1707 see List of Acts of Parliament of the English Parliament and List of Acts of Parliament of the Scottish Parliament.For… …   Wikipedia

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”