Hole-in-One insurance is a rare, but useful, type of coverage designed for contests with attention-grabbing grand prizes. It’s named for insurance typically taken out by golf tournament sponsors that run contests offering big-ticket incentives. These prizes are awarded to contestants who make a hole-in-one on a single try.
This type of coverage, however, is not limited to golf. Hole-in-one insurance is also purchased by sports leagues and other retailers that run similar contests. These contests usually feature expensive grand prizes, like new cars, cash or elaborate round-trip vacations.
Why is hole-in-one insurance necessary?
This type of insurance spares tournament sponsors from incurring the large expense of paying a grand prize winner. Although sponsors love the idea of running such a contest, they don’t actually want to pay a winner who pulls off a seemingly impossible feat. Nor do they have a luxury car or tons of cash on hand to award the winner in the first place.
Often times, these contests end with no significant payout to contestants. But in the event that one person gets lucky and does win, hole-in-one insurance will incur the large expense of paying out a grand prize winner. Ultimately, it turns the cost of running such a contest into a set dollar amount on the sponsor’s end.
Contest coverage can also be purchased for other sporting events — such as field-goal kicks in football, half-court shots in basketball or home runs in baseball. In fact, many TV game shows will also purchase insurance for million-dollar prizes.
How does it work?
This price indemnification insurance works just like any other type of policy. But instead of insuring your property against damage, you’re paying a premium to eliminate the risk of having to pay out an expensive grand prize.
For example, let’s say a sponsor wants to make the most of their sponsorship at a charity golf tournament. So they’ve decided to offer all spectators a chance to win a $10,000 prize on Hole 6 at the 165 yard mark. Before the event, the sponsor will purchase hole-in-one insurance for $350. On the day of the tournament, Mr. Tom Golfer makes an ace on Hole 6. This means he will now get a grand prize cheque for $10,000 — paid for by the insurance provider. If no player accomplishes the hole-in-one feat, the insurance company keeps the $350 premium.
What types of prizes can hole-in-one insurance cover?
Because hole-in-one insurance is designed to cover the cost of grand prizes, it’s usually expected a claim will involve potentially high payout amounts. Luxury cars, all-expenses paid vacations and newly-built homes are just some of the incentives businesses use to attract customers to their contests and tournaments. Be sure to check your policy carefully to understand what coverage entails.
Why trust Oegema Nicholson?
Not all insurance providers offer hole-in-one insurance. Oegema Nicholson can put you in touch with those who provide this unique insurance product. We can also help you shop around for the best rates on the market, and create a customized policy that suits your needs. So rely on us to help you insure a contest that will boost business and grow your customer base.
For more information on hole-in-one insurance, call us at 613-224-1455 or contact us here.