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Promotion Protection Insurance

Overview

Prize indemnity insurance covers contingent prizes on behalf of sponsors or promoters. Prize insurance allows the sponsor / promoter / organizer to offer a large, risk-free prize for only a fraction of the cost. Some examples include probability-based prizes such as drawing the correct envelope, dice rolls, spinning a wheel, etc., and skill-based prizes such as sinking a 60-foot putt, shooting a basketball from half-court or making a field goal from a certain distance.

Over-redemption insurance allows a marketer / sponsor to transfer the risk of a coupon or free product offer that is “too successful.” Sponsors / marketers often will distribute coupons, “buy one, get one free” or multi-purchase benefits to increase awareness and sales of their products. Our coverage allows sponsors to protect themselves against an unexpected high redemption of those coupons.

Contractual bonus insurance is coverage that is purchased by corporate sponsors, sports teams and entertainment companies to give professional athletes and entertainers an additional financial incentive in their contract to achieve a certain result. For example, a professional golfer could earn an extra $500,000 for every major championship that he / she wins, in which case, the risk of the additional $500,000 would be transferred to an insurance policy.

Promotion bonds, also known as game of chance surety bonds, are required in Florida and New York for any game of chance promotion over $5,000 in retail value. The promotion must be bonded and registered with their office. Rhode Island requires only a registration for any retail promotion over $500. No other states require these promotions to be bonded. Specialty Group can streamline this entire process through our online system called Insta-Bond.

Prize / promotion weather insurance is designed to stimulate sales for many types of retailers and manufacturers. If a certain weather event occurs on a predetermined day, consumers receive a full or partial refund on purchases made during the promotional period.  

Summary of Coverage

  • Prize indemnity insurance
    • Games of skill for sporting-related contests can be quoted through our online TotalEvent® system which includes coverage for basketball half-court shots and parlays, football tosses and field goal kicks, hockey slot shots and golf putting and hole-in-one contests
    • Games of chance such as dice roll games, spin-the-wheel games, the lucky envelope game and more
  • Over-redemption insurance
  • Contractual bonus insurance
  • Promotion bonds

Target Insureds

  • Integrated marketing agencies
  • Retailers
  • Athletic organizations
  • Golf courses
  • Nonprofit organizations

Standard Limits

  • Limits vary by promotion

Available Limits

  • Up to $10 million with more available subject to market support for insured promotions, over-redemption and contractual bonus

Carriers

Tokio Marine HCC affiliated carriers

  • Houston Casualty Company

Other carriers

  • Lexington Insurance Company
  • Certain Underwriters at Lloyd’s

Minimum Premiums

Geographic Scope

  • Available worldwide

Head of Underwriting

Sean Curtin
Sr. Vice President, Contingency and SHEL 
781-994-6225
scurtin@tmhcc.com

Underwriting Contact

Robin Lang 
Vice President of Promotions Division 
781-994-6025
promotionins@tmhcc.com

Business Development Contact

Chelsey Burnell  
Marketing Associate  
781-994-6154 

Claims Contact

Claims Department (Wakefield, MA)
800-927-6306
specialtyclaims@tmhcc.com

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