Chelsey Tucker graduated with a Bachelor of History degree from Metropolitan State University in 2019. She now writes about insurance with her specialty being life insurance and has been quoted on Help Smart Phone and MEL Magazine.

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years. He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent Daniel Walker

UPDATED: May 17, 2022

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What is it?

Prize indemnity insurance is a type of insurance that covers the cost of prizes and awards in case they are lost or damaged. When a company is sponsoring an event or contest, they might seek to purchase prize indemnity insurance. It covers the cost of prizes and awards in case they are lost or damaged, which can be costly to replace.

This type of insurance is typically provided by the event organizer, who purchases the insurance from a third party. This can be a common practice to reduce costs and ensure that the prizes are insured. For example, a small company may offer a golf promotion that awards a sizable cash prize for a hole in one. The chances that a golfer will get a hole in one are slim. However, the hole in one is still a possibility.

Find a prize winning policy by entering your ZIP code into this FREE insurance quotes tool now!

Prize indemnity insurance offers a policy that will pay the winning golfer if he or she achieves the hole in one.

Insurance providers that offer prize indemnity insurance may also offer other types of specialized protection for businesses, such as weather insurance for events, cancellation insurance for events and special event liability insurance.

Such insurance policies enable smaller companies to market their services with contests and reap the benefits of attention-grabbing marketing techniques.

Though the small company would not be able to pay the cash prize in the event of the hole in one winner, prize indemnity insurance enables the company to offer the cash prize with a guarantee that if a golfer achieves a hole in one, the prize indemnity insurance policy pays the golfer the cash prize. To learn more about this specific form of insurance go to this website hosted by the University of California at Berkeley.

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Benefits of Prize Indemnity Insurance

The main benefit of prize indemnity insurance is that smaller businesses are able to offer great contests and prizes for marketing purposes without having the cash on hand to cover the large prizes in the event someone wins. The company gets the benefits of marketing a high-profile, high cash prize event without being required to cover the cost if the high-priced prize is won.

Visit the National Federation of Independent Businesses for some great tips on running a contest to promote your business.

Companies reap the rewards of having their brand or company name attached to a high-profile contest without carrying the total liability for the cost of prizes. Generally, prize indemnity insurance provides a win-win situation for companies, contest winners and insurance carriers.

Contests Insurable by Prize Indemnity Insurance

Other contests that may be covered by a prize indemnity insurance policy include half-court basketball shot contests, field goal kick contests, raffles and prize lotteries. Prize indemnity insurance allows companies to offer large cash prizes or high-ticket merchandise prizes for contests at a fraction of the cost for the prizes.

To obtain prize indemnity insurance, a proposal describing the contest and prizes to be awarded is submitted to an insurance broker or agency that provides specialty insurance. However, interested companies and individuals may obtain free online quotes from insurance providers that offer prize indemnity insurance.

Get Free Quotes for Prize Indemnity Insurance

Using a free online quote tool, you can quickly compare rates for various insurance companies that offer this specialized type of insurance policy. A free online quote tool for prize indemnity insurance will collect information such as your name, address, contact information, and an electronic signature disclosure statement.

Alternatively, you can download the PDF version of the application and fax the document to the insurance providers for a quote. However, to obtain quotes and purchase prize indemnity insurance online, an electronic signature disclosure is required.

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Compare Insurance Providers Rates to Save Up to 75%

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Factors that Determine the Cost of Prize Indemnity Insurance

Three main factors determine the cost of premiums for prize indemnity insurance:

  1. Difficulty of the Promotion: The more difficult to achieve the big-money prize for the promotion, the lower the cost will be for prize indemnity insurance. As a hole in one is a difficult achievement for a golfer, the rates for prize indemnity insurance for a hole in one contest will be relatively low.
  2. Number of Attempts Allowed: The more attempts that are afforded to contestants to win the big-money prize, the higher the cost of prize indemnity insurance.
  3. Prize Value: The prize value of the big-money award will also be considered when determining the cost of prize indemnity insurance.

Prize indemnity insurance rates are determined by underwriters based on past promotions of a similar nature combined with the three determining factors listed. Additionally, if the prize will be awarded in one lump sum versus awarded as annuities in 20 to 40 year increments, then the cost of the prize indemnity insurance will be higher. If the prize will be paid over a number of years, the present value to be insured is considered to be less than if the payment was provided to the winner in a lump sum.

Exclusions for Particular Contests

Certain exclusions may be imposed on the contest by the insurance carrier. For example, a half-court basketball toss may exclude professional and former pro basketball players, as well as high school and college players who have played on teams within the past few years. For football contests, insurance providers will most likely exclude professional football and soccer players, as well as those who have recently played on high school and college teams.

Depending on the contest, the insurance provider may exclude certain individuals from participation in the contest.

Be sure to mention exclusions when advertising your contest by posting them in the contest rules.

Free Quotes for Prize Indemnity Insurance

Compare insurance companies and policies to get the best deal for your contest’s prize indemnity insurance using the free online comparison and quote tool. Obtaining quotes online takes most of the leg work out of comparing rates for your company’s contest. With just a few details about your contest, you can request a quote online.

Due to the specific nature of this coverage, you will need to talk to an agent. Luckily, the tool provided will allow you to chat with an online representative who will send you in the right direction for your specific needs.

Start looking for the right policy by entering your ZIP code into the FREE tool today!

Before making any final decisions on your insurance company, it is important to learn as much as you can about your local insurance providers, and the coverages they offer. Call your local insurance agent to clear up any questions that you might have. Questions to consider asking include, “What is the best coverage plan for me/my family/my situation?” “What are the minimum coverage requirements in my state and what form of coverage do you recommend?” “Do you guys offer any bundle discounts if I take out both my auto insurance and home insurance with you?” and “What is the average rate of insurance quotes you guys offer?”

Before making any big insurance decisions, use our free tool to compare insurance quotes near you. It’s simple, just plug in your zip code and we’ll do the rest!

Start looking for the right policy by entering your ZIP code into the FREE tool today!