What's Prize Insurance All About?

Prize Insurance enables marketers to feature a “big-purse” cash prize... maybe $50,000, $100,000, or even $1,000,000 in promotions. Large cash prizes get attention, create excitement and help to set a promotion apart from the many marketing messages that the average person interacts with on a daily basis. Cash is the number one prize that people seek and prize insurance enables marketers to offer big cash prizes at only a fraction of the cost. Pepsi has done the largest insured prize in the history of the promotion industry with their Play for a Billion Sweepstakes Play for a Billion Sweepstakes in the summer of 2003.

First you need to work with someone that has the promotional planning expertise and the contacts with a professional financial underwriting company which will offer what’s known as “">contingency insurance." Basically, the underwriters work with a promotional planner to create a program that has a degree of “insurable risk”, and depending on how the program is structured, will absorb the risk at a flat rate to the sponsor…generally at a maximum of 20% of the cash prize being offered. They take the risk and the sponsor gets the benefit of a big prize, no danger to over extending your budget, and peace of mind. You also have the option of getting over-redemption insurance to assure that a promotion stays within a set budget.