Prize Indemnity Insurance
A great way of introducing an item or object of value for example a motor car, a holiday or cash as an elite prize in a competition. To be utilised by schools, charities, sporting clubs or institutions to raise funds without being saddled with the responsibility of paying the prize out in the event of a win.
Easy explained it comes down to the insurer doing the necessary calculations to determine the risk premium on the prize value, the possibility of the prize being successfully won, the number of participants in the competitions and other factors.
The fundraiser proceeds to pay a premium to the insurer and if the prize is successfully won, the insurer pays the amount out.