Municipalities can experience extreme fluctuations in the annual costs of snow removal.  Too few snow days are great for the city coffers but the effects of a winter that has too many snow removal days leading to overtime and additional equipment expense can be devastating.

The unchecked overrun in budgeted expenses will require the municipality to shift dollars from other needy departments or borrow against their financial holdings.

Introduce weather insurance.

Municipalities can purchase weather insurance to even out these annual costs by taking out a policy that provides for incremental payouts for each additional unbudgeted snow day they incur.

Budgets are fixed and cost overruns eliminated.

After the volcanic eruption of Eyjafjallajokull, Insurers scrambled to understand the aggregate liabilities they faced and volcanic disruption became a standard exclusion for event cancellation/non appearance policies.  There are a few markets that are now allowing consumers to buy back the volcanic disruption exclusion at a 3.5 to 4% rate.

A few points of interest:

• Katla volcano is 12 miles from the Eyjafjallajokull volcano.
• Katla is buried under the massive Mydalsjokull glacier – one of Iceland’s largest.
• The Mydalsjokull glacier has more than twice the amount of ice than the current eruption has burned through.
• Katla lies under the Mydalsjokull glacier and concerns scientists because melting cold water and lava causes explosions and ash to shoot into high altitudes.
• Scientists fear tremors at the Eyjafjallajokull volcano may trigger an even more dangerous eruption at Katla – estimated to be 10 times stronger and shoot higher and larger plumes of ash into the air.
• If this happened, it would be considered the worst global devastation in airline history. .

The problem is that scientists have no way of determining if Katla erupts tomorrow or 100 years from now. All we can do is be ready.

Volcanic disruption coverage.

Think about it.

Click here for more information on Event Cancellation coverage

Sponsoring a NASCAR® is a big commitment and investment for Brands and they need to ensure they are getting an ROI. There are a couple of ways insurance can help.

First, to sweeten the deal for the owners and drivers and help strengthen the Brands negotiations, we can create a Contractual Bonus that pays if the driver wins a certain race, series or the championship.  For example – what if a Brand were to offer Dale Earnhardt Jr. $250,000 if he wins the race at Talladega? The fact that there is a chance this could happen means that you can obtain an insurance policy to assume the risk and liability of paying the bonus. Let’s say it costs 15% or $37,500 to put the insurance policy in place. The Brand can position the offer of $250,000 to the team and driver and know that their budget is fixed at $37,500. Win #1.

Second, to help the Brand directly tie the investment of the sponsorship to product sales, we could create another Contractual Bonus, but this time we pay the consumers. For example – the Brand could create a promotion were everyone who purchases their product and registers online before the race would win $5, $50, $500 or even more if Dale Earnhardt Jr. wins. Let’s use the same 15% and say that we want to give everyone a free product. Your product retails for $5, but the cost (including fulfillment costs) would total $2 and you expect 100,000 consumers to register. So, 15% x $2 x 100,000 = $30,000. So for $30,000 you can make a great offer that ties product purchases directly to your sponsorship investment. Win #2.

This is just one example of how Contractual Bonuses could be used with a particular sport, but there are countless ways they could be structured and applied to virtually any professional sport.

True:

We work with a number of CPG companies who use coupons as a way to drive sales of their various Brands. These coupons are delivered through email campaigns, online ads, Facebook and various other mediums.  The consumer “clicks” the link to the coupon and is then able to print a coupon that can be redeemed at their favorite retailer. The tactics are working – in fact they seem to be working too well.

Coupon redemption was a proven winner in 2009 with many Brands taken aback by the higher than expected redemption. Perhaps it was the economy that made us more interested in saving money or maybe it was the convenience of the technology where we can simply click and print the coupons we want; whatever the reasons, likely this trend will continue in 2010.

Strange:

To help manage our new found infatuation with coupons, some companies are using the same technology that made it easy to click and print to now control the number of coupons that are distributed.  So if the limit for a given coupon is set at 100,000 prints and I am the 100,001 person to click and print, I don’t get a coupon I get a “Sorry No More Coupons” message. Talk about a negative Brand experience not to mention a lost sale and slighted consumer!

I have been in this business long enough to know that if a coupon is redeemed; a product likely has been sold.  Therefore if more coupons are redeemed, more products have been sold and I am pretty sure this is a good thing. So why stop a good thing?

I understand we need operate coupon programs with some limits, but not to the point where we create negative experiences and bad PR. There is a better way to manage costs without creating bad will; by managing risk and minimizing liability through Redemption Insurance. With Redemption Insurance – if you set the limit at 100,000 prints, then at the 100,001 print you don’t get a “Sorry” message, you get a coupon; and the best part is the insurance company is now paying for it. Click here to download a whitepaper on Redemption Insurance if you want to dig deeper.

We all know the story of the well publicized “transgressions” of Tiger Woods. We also know that those transgressions likely impacted his bank account and cost Sponsors big cash with contract cancellations.

If you are a company that uses a spokesperson as an endorser of your product, then their actions; good or bad could impact your brand and your profitability. We obviously want the good impact, but need to plan and manage for the bad.

There is an insurance coverage called Death and Disgrace that is available to companies that use a spokesperson that provides financial protection should that spokesperson die or become disabled or become disgraced in the eyes of the public. Typically all costs associated with a campaign being canceled would be reimbursed. This could include production costs, advertising costs, print costs, etc.

The cost of the coverage is determined, in part by the health and reputation of the spokesperson. Therefore if your spokesperson is in good health and has a good public image, your costs are going to be less then if the opposite were the case.

While Death and Disgrace insurance can’t prevent transgressions, it will provide financial protection should your spokesperson decide to explore their wild side.

Well let’s get started with Introductions…

My name is Scott La Croix.  I’ve been a contingency underwriter for over a decade helping folks like you be better at what they do.

This site is meant for Insurance Brokers, Underwriters, Marketing and Promotions Agencies, Brand Mangers, Risk Managers, CFO’s, Sports Agents, Team Owners, General Managers, Directors of Player Personnel, Event Planners, Event organizers, Theater Groups, Entertainment Groups, and the list goes on.

If you’re not using contingency insurance in your everyday marketing and risk management decisions then you’re operating at a competitive disadvantage.

Because I can tell you your competitors are using it and they are beating the heck out of you with it.

A few examples:

• Brokers are using it to create new revenue channels for their brokerage and the smart ones are kicking open doors to new clients…your clients…. by offering insurance solutions that you can’t.

• Brands and agencies are using it to leverage their promotional budgets so that they can create inspiring attention grabbing promotional offers that influence consumer decision making processes.

• Teams and Sponsors are using it to manage their contractual obligations as it relates to performance bonuses that the athlete, coaches can earn.

• Sponsors are leveraging their sports sponsorships and presumably the associated fan loyalties to create exciting consumer based promotional offers that drives sales and steal your market share.

Contingency insurance is not simple… it takes applying the knowledge and principles I’m going to teach you and applying them to your business… it takes work…we’ll do it together….let’s get started.