I’ve not thought much about holes-in-one, mostly because my golf game is such that I’ve never been in any danger of making one. The charity responsible for the Greenbrier Classic golf tournament, however, must have given them some thought. Not only did it decide to award spectators a cash prize in the event of a hole-in-one on a certain hole, it purchased insurance to protect itself in the event of any pay-out. This turned out to be a smart move, because two golfers made holes-in-one resulting in nearly $200,000 in total payouts. Unfortunately for the charity, though, it chose a hole that fell short of minimum yardage requirements in the policy, and its insurer denied coverage. The coverage dispute quickly turned into litigation and, just recently, the Fourth Circuit Court of Appeals affirmed the district court’s finding of no coverage.

To the extent that this case provides any lesson, it’s that golf tournament organizers should pay attention to minimum yardage requirements when insuring their hole-in-one giveaways. I find myself most interested, though, in what the Court’s decision never even addressed: when writing the policy, how did the insurance company’s actuaries determine the minimum yardage they were willing to cover?

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