The common consensus is that insurance policies are limited to mundane classes like personal cars, houses, marine and aviation, with little awareness of the ability to mitigate the risk of the financial exposures attributed to sports performance that operate at numerous levels, from low league domestic competitions to Major international events such as the EURO 2024 tournament next year in Germany.
Successful performance in the sports sector often brings a significant financial gain to players and teams. The outcome of promotional marketing activities, such as competitions, predictor games and bonuses are difficult to foresee so whilst these promotional activities create huge engagement opportunities, build brand awareness and drive sales, the outcome can pose large financial risks to businesses.
What is Prize Indemnity insurance?
Prize indemnity insurance covers the financial-loss risk of a company’s promotional activity; the campaign is usually designed to entice new customers and build customer loyalty by engaging them in predictor games with high value prizes; prize indemnity insurance will reimburse you should these prizes be won.
Policy premium depends on the value of the prize and the statistical odds of the prize being won. By insuring the prize, it is as good as guaranteed, making the promotional campaign or activity more reliable which, in turn, can increase engagement with the competition itself, as well as brand reputation.
This cover can benefit businesses, non-profit organisations or sponsors who are running a promotional campaign in which there is no one guaranteed winner.
What is Contractual Bonus Insurance?
Whilst achieving a League win, European qualification or promotion brings kudos, silverware, and prize money, it can lead to serious financial implications if contractual bonuses aren’t insured and/or managed effectively. Financial incentives triggered by performance thresholds being surpassed are commonplace across all sports, including individual sports like golf and tennis through to team sports like rugby and baseball.
When Argentina reached the Final of the 2022 FIFA World Cup, a headline hit the National press surrounding the financial impact of a win for the Argentine “FA”. Like many professional sports, winning a tournament or event not only brings a huge achievement and recognition, but it can also bring a cost.
In the case of the Argentinian “FA”, a victory would have netted the players, coaches and management substantial bonuses. The most recent example is a Premier League team achieving an exceptional insured feat, which allowed the club to reward players, as well as over 1000 non-playing staff, with a 20% wage bonus.
See how your club, business or campaign could benefit from these types of cover by contacting our Associate Director, Tom Landale, on 07710 417127 or by emailing him at tom.landale@mcclarronssport.com.
