Offering large cash sums or valuable prizes within a promotion is common practice to gain exposure in the public eye. Where such prizes are not guaranteed to be paid out, there can be a large liability upon the balance sheet, but this can often be removed or reduced through a Prize Indemnity insurance policy.
These policies are designed to reimburse the organiser for prizes won during the promotion, which can allow larger prizes to offered, boosting the impact of the promotion. The policy can be tailored to the specific promotion and the needs of the organiser, as can the prizes that are reimbursed (for example reimbursing all prizes, only large prizes or when the pay-out reaches a specific limit).
The types of promotion that can be insured are endless, but typically include:
- Sporting achievement and spectator participation promotions
- Attendance increasing promotions at an event
- Game show, casino and lottery style games
- Refunds for retail purchases made if a certain event occurs
- Radio and TV show promotions
- Bonuses contractually paid under an athlete or teams contract if they achieve a particular sporting target