Why We Need Insurance

1. Why We Need Insurance Philip Holdway-Davis Underwriting Manager Federal Pacific Insurance Limited Tonga & Samoa

2. Introduction • Malo • FPI • PHD • GIP • Today: Why We Need Insurance • Tomorrow: Insurance Risk Management Basics • Insurance vs Beer • Insurance vs Gambling • Life, Health & General

3. Why We Need Insurance • Why do we need insurance? • How & why insurance started • Joseph, Pharoah’s No. 2 • The beginnings of the insurance industry today • How insurance works • Making a claim • What if there was a natural disaster? • How an insurance company makes a profit • Types of insurance

4. Why Do We Need Insurance?

42. Federal Pacific Insurance - Key Products • Business Assets (Material Damage) • Business Interruption • Public Liability • Contract Works • Personal Accident • Private Motor Vehicle • Commercial Motor Vehicle • Employers Liability • Domestic House & Contents

43. Business Assets (Material Damage) • Unforeseen, unintended, sudden, accidental and fortuitous physical loss or damage • Buildings and structures • Business contents, machinery, equipment and stock • Fire & listed named perils & cyclone and natural disaster • All perils except as stated in the policy wording exclusions

44. Business Interruption • Policy triggered if FPI pays a claim under the material damage policy • Pre-tax net profit • Wages/salaries • Loss of rent income • Interest for loans • Telephone & communication • Power and electricity • Water rates • Additional increased cost of working

45. Public Liability • Indemnifies you for all sums that a competent court in Tonga finds you legally liable to pay, for third party property damage and third party bodily injury due to a breach of your duty of care to the public. • Product liability included for the manufacture, supply or distribution of products in Tonga. • Defence costs (if not expressly excluded) • Landlord’s liability included • Tenants liability included • Bailee's liability – optional • Defective design, mechanical plant and removal of support - optional

46. Contract Works (C.A.R.) • Unforeseen, unintended, sudden, accidental and fortuitous physical loss or damage • Public liability arising out of the contract works • Contract value • Materials supplied by principal or free to contractor • Demolition and removal of debris after a loss • Architects, engineers, consultants fees • Existing structures • Contractor’s temporary buildings and site huts • Contractor’s plant and machinery • Employees hand tools

47. Personal Accident • Group policy preferable but can do individual • Lump sum for death by accident or illness (up to 3x annual salary) • Lump sum scale for disabilities caused by an accident • Weekly accident benefit • Exclude pre-existing conditions • Maximum age 60

48. Private Motor Vehicle • Market value • Full comprehensive cover – own damage and third party liability • Third party fire & theft • Third party only • Uninsured third party cover up to TOP$3,000 • Trailer cover • Reasonable salvage and rescue costs

49. Commercial Motor Vehicle • Market value • Full comprehensive cover – own damage and third party liability • Third party fire & theft • Third party only • Uninsured third party cover up to TOP$3,000 • TOP$10,000 death by accident benefit • TOP$5,000 funeral costs • Disability modifications • Hoists and hydraulic rams • Property in transit/removal of debris/salvage & rescue costs/safety of the vehicle/tarpaulins, sheets, ropes and chains • Invalidation - optional

50. Employers Liability Indemnifies you for all sums that a competent court in Tonga finds you legally liable to pay, for bodily injury due to a breach of your duty of care to an employee