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RISK FACTORS
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4.1 Risk management and coverage
4.1.2.
RISK COVERAGE AND INSURANCE
Some risk factors, were they to materialize, could be covered by one or several of
the insurance policies taken out by the group as part of its insurance programs.
To mitigate the consequences of certain potential events on its operations and on
its financial position, AREVA transfers risk to reputable insurance and reinsurance
companies worldwide. For example, AREVA has acquired insurance coverage for its
industrial risks, its civil liability and other risks related to its operations, both nuclear
and non-nuclear. The amount of the respective guarantees varies according to the
type of risk and the group’s exposure.
AREVA’s Insurance Department leads the insurance program for the entire group.
The department:
p
recommends solutions to management either to retain the risk and finance it
internally or to transfer it to the insurance market;
p
negotiates, sets up andmanages global and comprehensive insurance programs
for the entire group and reports to the group’s management on actions taken
and costs incurred; and
p
settles claims for the subsidiaries involved.
4.1.2.1.
WORLDWIDE GROUP INSURANCE PROGRAMS
Directors and officers liability insurance
Liability insurance for directors and officers serves three purposes:
p
firstly, it provides liability coverage for financial risk incurred by the group’s
directors and officers due to damages suffered by third parties as a result of
errors or misconduct in the course of their duties;
p
secondly, it reimburses group companies that are legally allowed to indemnify
directors and officers for claims submitted against these individuals;
p
thirdly, it covers civil and/or criminal defense expenses incurred by directors and
officers as a result of any claims based on errors or misconduct in the course
of their duties.
The policies exclude coverage of claims based on intentional misconduct by a
director or an officer, or on personal gain (financial or otherwise) to which a director
or officer was not entitled. Fines and penalties levied against directors and officers
are also excluded, as well as claims for losses due to pollution, asbestos or toxic
mold. Liability insurance policies for directors and officers exclude claims based
on the purchase of securities or assets of a company at an inappropriate price.
AREVA’s liability
The group is covered by a “worldwide” civil liability programwith limits appropriate
to its size and operations. The program covers:
p
operator liability related to operating activities and services performed at
customer sites;
p
product liability covering the post-delivery period; and
p
professional liability (“errors and omissions”) covering the financial consequences
of damages associated with intellectual services performed by a company of the
group for its own account or on behalf of a third party.
It is also covered for liability for environmental damage, for damage to property held
on behalf of third parties and for product recall expenses, among others.
The programcovers themonetary consequences of civil liability likely to be incurred
by the operating entities due to their operations, including bodily harm, property
damage and consequential damage suffered by third parties, excluding nuclear
operator liability. Certain events not usually covered by insurance, such as landslides,
damage from asbestos, or damage caused by computer viruses, are also excluded.
Liability insurance limits vary based on available supply on the insurance market
and on a reasonable assessment of the risks to which the group is exposed, as
identified by the operating units and the Risk and Internal Audit Department, in
particular during the risk mapping process.
Coverage relating to nuclear facility operations
For a description of insurance taken out related to nuclear facility operator activities,
see Section 4.4.1.
Nuclear risks.
4.1.2.2.
OTHER INSURANCE
The group has recourse to Coface type coverage for some large export contracts
from France, such as the construction of nuclear power plants. Lastly, insurance
policies are taken out for automobile liability and occupational injuries, in accordance
with the legal obligations of each country in which AREVA and its subsidiaries are
based.
4.1.2.3.
OUTLOOK AND TRENDS IN 2017
The insurance programs will be renewed in April 2017.
2016 AREVA
REFERENCE DOCUMENT
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