Broker Focus: Prize Indemnity Insurance

We spoke again to Derrick Leue from PROLINK, this time giving us an insight into Prize Indemnity insurance:

"Who Is Prize Indemnity Insurance For?"

Derrick Leue (PROLINK): "Individuals and companies who want to run a contest for public relations reasons, or to bring awareness to a product, they can do so by buying something called 'Prize Indemnity' insurance."

"What Does Prize Indemnity Insurance Cover?"

DL: "It's geared to protect the sponsor of the event so that if the prize or contest is won then it's going to be insurance that pays out the proceeds."

"What Types Of Event Would Require Prize Indemnity Insurance?"

DL: "If you've ever played in a golf tournament and you see a hole-in-one, a hole-in-one is a form of Prize Indemnity and is the most popular form. When it's a $5,000 or a $10,000 giveaway, that's insurance behind it if someone gets the hole-in-one. If you've ever attended a national hockey league game or maybe a professional football game, they often have contests such as 'shoot the puck' from center ice, and if you hit the goal you win 'X' prize. Those will be insured for the sponsors so that they're not going to be paying for it."

"When Should Prize Indemnity Insurance Be Bought?"

DL: "If you go with a unique contest that has not been done before to get a lot of interest, you should be looking at buying this at least 120 days before you run the contest because it takes often times five to seven business days to get it underwritten and purchased. Then you have to understand the product and then you start marketing it. So it's never too early in order to get the best return on your investment."

"How Much Does Prize Indemnity Cost?"

DL: "Prize Indemnity insurance is more affordable than a lot of individuals would think. So if you're trying to gain exposure on something where you have a half a million dollar giveaway, if you were to spend the money on someone who won that prize it would be cost prohibitive. But the costs of insurance will be a couple of thousand of dollars maximum to be able to cover that. And if you do it well in advance you can certainly get a lot of marketing and PR legs out of something like that. But again you should be planning these things well in advance and have the insurance in place." 

You can browse our current range of Prize Indemnity products here.