Included within the portfolio of products offered by Specialty Insurance Group, a unit of Everest Insurance® , is a coverage called Contingency. Contingency insurance includes Prize Indemnity, Event Cancellation, Non-Appearance, Contract Bonus Insurance and Weather Insurance. This article will deal with one of those coverages, Prize Indemnity. Brokers and clients often think of Hole-InOne insurance when considering Prize Indemnity, but there is a lot more to this coverage. Prize Indemnity insurance policies are issued to address the accomplishment of a feat or a weather event.
Corporate sponsors and event promoters have historically used this type of coverage to drive attention and traffic to a promotion with the goal of increasing overall brand awareness. There are documented instances where well-designed promotions using a prize indemnity policy - to protect the financial risk transfer from the promotion - has assisted in increasing product sales.
Here are a few examples of Prize Indemnity policies written by the SIG unit of Everest Insurance®™ that have been extremely effective in increasing product sales:
A large furniture retailer located on the east coast promoted a two-month sales initiative that promised if a customer bought furniture during the promotion period and the local Major League Baseball team won the World Series, those customers would receive a refund on the purchase price of their furniture. Furniture sales increased by 60% over the same prior year period!
A jeweler offered a refund on the purchase price of jewelry purchased during a designated period of time if it snowed at a designated area more than 6 inches on New Year’s Day. Jewelry sales increased by 50% during the period!
Two professional basketball players from the NBA were given a chance to shoot a full-court basketball shot across Hollywood Boulevard on Jimmy Kimmel’s late night show. Had either made the shot, the audience would have shared $1,000,000. The event was widely promoted to drive viewership to Jimmy Kimmel Live!
Contingency business requires a strong background in specific policy wording and rate making. While prize indemnity is a companion product offered to many of SIG’s current sports and entertainment clients, this coverage can also be designed for any sort of client whose sales would benefit from a unique prize indemnity based promotion.
It’s well known that many businesses offer contests or prize promotions to generate new clients and increase their brand awareness. Insurance brokers should consider mentioning contingency insurance to help drive their client’s business promotions. The contingency underwriters at SIG will be happy to help out!
A future article will provide details on SIG’s Event Cancellation and Non-Appearance program where SIG has provided coverage for non-appearance protection for many of the more notable concert tours that have taken place over the past two years…stay tuned for more.