A promoted prize is a published term, and the promoter owes it
The insurance behind the promotion is a contract between the promoter and an insurer. A winner is not a party to it, is not told about it, and is not affected by it.
The Cover Slip / Questions
The desk’s questions, answered
Questions
The ten questions this desk is built around, answered in the order a reader meets them. Every answer is consistent with the four samples on the overview, and each of them can be checked against the arithmetic that produced it.
Slip stub
- Questions
- 10, answered in order
- Samples used
- the promotion, the golf day, the book, the meter
- Consistency
- every answer traceable to the four samples
the perilOne stated act that must happen for the prize to be owed - and the estimate of how often it has
the retentionThe largest prize the promoter funds from the promoted product’s own margin, before any cover responds
the coverA schedule of twelve fields that indemnifies the promoter, and is never a reader’s protection
Desk The Cover Slip, cycle 62 · Page the questions, in full · Count 10 questions · Schema FAQPage rendered from the same array the visible answers come from
Direct answer The ten questions below cover who owes a promoted prize, what the peril is, how a premium is built from an expected loss, what a retention does, what the limits mean, how a claim runs on two clocks, what a guaranteed prize is funded from, and what a promoter that stops trading leaves behind.
The first four
01
02
The peril is the single act that must happen
Everything on this desk is stated per peril. Two promotions can both promise 1,000,000.00 and be nothing alike, because one act may have happened in 2 of 570 seasons and another may never have happened at all.
03
The premium is the expected loss plus a load
On the sample terms a 1,000,000.00 prize at a 0.351% peril gives an expected loss of 3,510.00, and a 40.0% load makes the premium 4,914.00. Divided across 125,000 qualifying accounts that is 0.0393 each.
04
A retention is the largest prize the promoter funds itself
The sample line is 10% of one month’s gross win on the promoted market, which is 42,000.00 on 420,000.00. A 1,000,000.00 prize is 23.8 times that line, so it is transferred; a 25,000.00 golf prize is 3.1 times an 8,000.00 line, so it is transferred too.
The next three
05
The limits are the most the insurer pays, per event and across the period
On the golf day the per-event limit is 25,000.00 and the aggregate is 100,000.00, which is four wins in fourteen holes. The fifth is the promoter’s again.
06
The claim runs on two clocks
The winner is paid by the promoter on the promotion’s own term, which on the sample is day 1. The promoter’s own claim settled on day 11 after a nine-document pack and six working days of ledger testing, so the two clocks differ by ten days.
07
A guaranteed prize is usually funded rather than insured
One per cent of 52,000,000.00 of qualifying stakes is 520,000.00 a month against a 500,000.00 drop, which funds 6,240,000.00 against 6,000,000.00 of payouts and grows the pot by 4.0%. The liability and the money arrive together, so there is nothing to transfer.
The last three
08
The schedule has twelve fields and the promotion publishes none of them
The promotion publishes five fields - promoter, period, act, prize and claim route. The only thing the two documents share is the wording of the peril.
09
Eight checks on the promotion are the whole of the reader’s work
Name the promoter, confirm the prize’s form, write down the act, find who certifies it, diarise the window, note the route to claim, read the variation clause and ask what happens if the promoter stops trading.
10
The one risk cover does not address is the promoter itself
A prize is an unsecured promise. There is no fund held for winners and no arrangement behind the promotion changes that, which is why the identity of the promoter is the first check and not the last.
The questions, in full
q01
Who actually owes a promoted prize?
The promoter that published the offer. A promoted prize is a term of the offer, so it is owed on its own words by the business named in it. Any insurance behind the promotion is a separate contract between the promoter and an insurer, and the winner is not a party to it and does not need to know about it.
q02
What is the peril, and why does this desk put it first?
The peril is the single act that must happen for the prize to be owed. It comes first because the prize only fixes the size of the exposure while the peril fixes the probability of it, and the product of the two is the number a promoter plans for. Two promotions can promise the same 1,000,000.00 and be completely different risks.
q03
How is an insurance premium for a promoted prize worked out?
Four lines: the prize, an estimate of the peril, the expected loss they multiply to, and a load the insurer adds for uncertainty, expenses and margin. On the sample terms 1,000,000.00 at a 0.351% peril gives 3,510.00, and a 40.0% load makes the premium 4,914.00, which is 0.0393 for each of 125,000 qualifying accounts.
q04
What is a retention, and how does a promoter choose one?
A retention is the largest prize the promoter is willing to fund from the promoted product’s own margin. The sample rule sets it at 10% of one month’s gross win on the promoted market, which is 42,000.00 on 420,000.00 of monthly gross win, so a 1,000,000.00 prize at 23.8 times that line is transferred rather than kept.
q05
What do the per-event and aggregate limits mean?
The per-event limit is the most the insurer pays for one occurrence and the aggregate limit is the most it pays across the whole period. On the sample golf day the per-event limit is 25,000.00 and the aggregate is 100,000.00, which is four wins across fourteen designated holes; a fifth win falls back on the promoter.
q06
Can the insurer refuse to pay, and what does that do to the prize?
The insurer can decline a claim on the schedule - usually for a peril that does not match the written definition or a notification outside the window. That decline is a matter between the promoter and the insurer and does not cancel the promotion. On the sample book both declinatures ended with the winner paid by the promoter.
q07
How long does a claim take, and when does the winner get paid?
Two clocks. The winner is paid under the promotion, which on the sample terms is day 1. The promoter’s own insurance claim was notified two hours after the act, ran an adjuster from day 1, took six working days to test a 125,000-entry qualification ledger inside a nine-document evidence pack, and settled on day 11 - ten days after the winner was paid.
q08
Is a guaranteed jackpot insured?
Usually not; it is funded inside the product. The sample guaranteed prize sets aside 1.0% of qualifying stakes, which is 520,000.00 a month against a 500,000.00 drop, funding 6,240,000.00 against 6,000,000.00 of payouts in a year and growing the pot by 4.0%. Because the money and the liability arrive together there is no lump-sum hole to transfer.
q09
What does a promotion have to publish, and what does it keep back?
A promotion publishes five fields: the promoter, the promotion period, the act that must happen, the prize and the route to claim it. The cover behind it has twelve fields of its own, and on the sample book none of the twelve appears in the offer - the only thing the two documents share is the wording of the peril.
q10
What happens if the promoter stops trading before a prize is paid?
The prize is an unsecured promise, so the winner ranks as an ordinary creditor with no fund held for them and no protection scheme behind a promoted prize. That is the one risk an insurance market does not address for a reader, and it is why the identity of the promoter is the first of the eight checks on a promotion.