Businesses like car dealerships, restaurants and taverns, and religious organizations often run promotions or contents for their customers, or members. In the course of doing this, these groups typically offer a prize to one or more winners. Whether a prize is available through a raffle, random drawing, or competition, it is usually something of value. Some companies may give away concert or sports tickets, while others have valuable gift certificates, or products available as a prize. Whatever the aim of their contest, it is important for business owners and individuals running a promotion to have prize indemnity insurance in place if the value is substantial.
As an experienced independent commercial insurance agent can attest, prize indemnity insurance allows companies or individuals running a contest to pay a premium to their insurer at the outset of an event. This way, they can avoid maintaining often large amounts of cash necessary to pay for the cost of a prize. With indemnity insurance coverage, if an insured ultimately gives away a prize to a contest winner, the insurer can reimburse the insured for the cost of that prize.
In meeting with a local independent business insurance agent concerning indemnity coverage, those planning a contest can expect that an agent may discuss different kinds of indemnity insurance available, depending on that particular person or company’s needs. She may discuss hole-in-one coverage, which is a kind of prize indemnity insurance that is often purchased for golf tournaments to cover prizes offered to the winner of a hole-in-one contest. And, as an independent insurance agent can explain, events like home run contests, retail store promotions, or half-court shots during a professional basketball game can also be covered with the proper prize indemnity insurance. Indemnity insurance can allow event and contest planners to be shielded from covering the costs of an expensive prize with their own personal, or their organization’s funds.
In the course of recommending prize indemnity coverage for a particular contest or event, an independent insurance agent will likely ask those planning the promotion a number of questions. An agent will want to know about the specific conditions that must be met in order for a prize to be won. For instance, for a trivia contest being run by a pub with a new car from a local dealership offered as a prize, a licensed independent insurance agent will want to know various details, such as how many trivia questions a person must answer correctly to win, and whether there are possible variations in answers that could still be considered correct. She may also inquire about the number of people participating in the trivia contest, what happens in the event of a tie, the previous trivia experience of participants, and the value of the car offered as a prize.
For promotions and contests like this, and otherwise, a seasoned independent business insurance agent can guide corporate and individual planners through the process of buying sufficient indemnity coverage for prizes. With the help of an independent insurance agent, they can get answers to their questions about selecting commercial indemnity coverage, and learn about exclusions and limitations typically included in a policy. By purchasing prize indemnity insurance through a licensed independent insurance agent, those running a contest know that in case of a big win, the costs for the prize can be covered.
Prize indemnity is very close to gambling and is actually considered gambling in some states and is regulated as such.
Other Enhanced Insurance articles related to Larger Business Insurance:
Enhanced Insurance is not written by attorneys. If you’re looking for legal advice, you need to contact a lawyer. Further, insurance practices and forms change constantly and are varied from state to state. For definitive answers in your area, contact a local agent.
While the majority of people want an agent involved in their purchase of insurance, many people want to see if they can save money by buying direct from the insurance company. Others want to try a direct quote to make sure the premium they’re now paying through their local agent is fair. If you want a quote for your coverage, click on the competitive quote button on the right side of this page.