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Prize Indemnity Insurance – Prize Insurance & Hole in One Insurance 

Prize indemnity insurance, also known as Hole-in-One insurance or Prize Insurance, is indemnification insurance for a promotion.

Contact us for a no obligation Prize Indemnity insurance quote today

What is Prize Indemnity Insurance?

Prize indemnity insurance is indemnification insurance for a promotion in which the participants are offered the chance to win prizes. Instead of keeping cash reserves to cover large prizes, the promoter pays a premium to an insurance company, which then reimburses the insured should a prize be given away.

Promotions and games can be effective business-building tools, but they also introduce financial risks. Prize indemnity insurance helps protect against those risks, by covering contingent prizes on behalf of sponsors or promoters. Allen Financial Insurance Group’s prize indemnity insurance allows the sponsor, promoter or 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 or spinning a wheel, 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.

Our comprehensive promotional insurance portfolio, and decades of insuring thousands of promotions and games, makes Allen Financial Insurance Group the right choice for all types of clients and promotional events. Our winning combination of products, experience and expertise equips us to rapidly develop unique, creative and budget-friendly insurable promotions that precisely support a client’s business objectives and brand.

How does Prize Indemnity Insurance – Prize Insurance – Hole in One Insurance Work?

Every good promoter knows that if you want to get people excited about an event, you have to create some buzz. Many times, the best way to ramp up the energy level of the crowd is to offer a prize, such as a bundle of cash, that participants have an opportunity to win during the event.

Hole in one insurance began growing in popularity in the 1980s as golf tournaments started awarding cash or other prizes to contestants who made a hole in one during the tournament. Since then, this marketing idea has expanded to other sports. Basketball events added half-court shot contests, hockey events sponsored blue-line goal contests and golf event coordinators added long putt contests.

What you may not know is most sponsors or promoters of these events do not pay these winnings out of money set aside for the contest. Instead they purchase prize indemnity insurance or putting contest insurance to cover the possibility that they will need to award these prizes.

Help your clients stand out from the competition with insurance that allows them to offer a large prize risk-free, for a premium that is a fraction of the prize value (insituations where the prize is not guaranteed).

Prize - Prize Indemnity Insurance - Prize Indemnity - Hole In One - Prize Insurance
Incentive Bonus

Incentive provisions are common in sponsorship or endorsement contracts with professional athletes; if the athlete achieves certain goals in his/her sport, the sponsor/endorser is contractually obligated to pay bonuses on a specified basis.  Since these bonuses are large additional sums, the potential contractual liabilities are significant.  The Incentive Bonus policy offers a guaranteed cost (the premium) and assumes the possible pay-out of the contract, reimbursing the insured for the sums they are obligated to pay.


Prize - Prize Indemnity Insurance - Prize Indemnity - Hole In One - Prize Insurance
Prize Indemnity

Games of chance where a prize can be awarded to a winner are commonly insured on a Prize Indemnity form.  The policy “pays on behalf of” the Named Insured if an eligible individual or contestant wins. It can cover basketball shots, holes-in-one, random number games, or any other advertising promotion.  The policy limits can range from $2,500 to well over $1 million, or the cost to purchase an annuity to pay out the prize over time.  For example, car dealers have successfully promoted sales during winter months with the promise that if it snows more than a certain number of inches, the price of every car sold will be completely refunded. Note: Prize Indemnity is NOT intended for promotions with a guaranteed winner.


Prize - Prize Indemnity Insurance - Prize Indemnity - Hole In One - Prize Insurance
Hole In One

Coverage rating is based upon the number of players, the value of the prize awarded for a hole-in-one, and the yardage of the hole(s) on which it is offered.

  • If you are unsure of the total number of players in your tournament, consider estimating on the high side. If you find you have fewer players than anticipated, you can request a refund after your event.
  • The longer the yardage (of the hole the prize is offered on), the lower the rate.
  • We will cover anything of value. Simply give us the dollar value and a description of the prize you are offering.
  • If your tournament is longer than one day, you must specify if you want coverage for multiple days.


  • Odds of a PGA Tour golfer making a hole in one: 1 in 3,000
  • Odds of a single-digit handicap golfer making a hole in one: 1 in 5,000
  • Odds of an average golfer making a hole in one: 1 in 12,000


Prize - Prize Indemnity Insurance - Prize Indemnity - Hole In One - Prize Insurance
Coupon Over – Redemption

Sometimes a coupon or free product offer can be “too successful.” Over-redemption insurance from AFIG can protect sponsors and marketers against an unexpected result of their promotion.

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


Prize Indemnity Insurance

Prize Indemnity

Contact us by phone (800) 874-9191, FAX (602) 992-8327
or email below for more Prize Indemnity Insurance information.

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Prize Indemnity Insurance