Saint Gobain - Registration document 2016

174 / 330

7 RISKS AND CONTROL
1. Risk factors
174 SAINT-GOBAIN - REGISTRATION DOCUMENT 2016
The captive insurance company set up to cover property risks
Group.
was highly successful and delivered real benefits for the
Companies acquired during the year have been integrated
into existing insurance programs.
Property and business interruption 1.5.1
insurance
insured by a local program. These local insurance programs
program. It does not cover operations in Brazil, which are
come under the Risk and Insurance Department’s supervision.
The Group’s non-excluded property and casualty risks and
insured assets are covered by a worldwide insurance
business interruption risks arising from accidental damage to
Department, specifically:
The programs meet the insurance criteria laid down by the
all policies are “all risks” policies with named exclusions; ‹
claims limits of liability are based on worst-case scenarios ‹
where safety systems operate effectively;
deductibles are proportionate to the size of the site ‹
concerned and cannot be qualified as self-insurance.
their impact on operations, and cover natural disasters like
which exclude certain risks, such as computer viruses and
These criteria take into account current insurance offerings,
amount.
floods, storms, earthquakes or tsunamis only up to a certain
In extreme scenarios, such events could have a substantial
costs and lost production costs.
uninsured financial impact in terms of both reconstruction
sites in the event of a fire or other incident, and provide an
findings of the annual audits carried out by independent
The Risks and Insurance Department’s policy is based on the
audits give a clear picture of the risk exposure of the main
prevention experts recognized by the Group’s insurers. These
scenario.
estimate of the financial consequences in a worst-case
the insurance market for all Group subsidiaries, excluding
Individual claims in excess of €12.5 million are transferred to
Brazil.
captive insurance company, which purchases reinsurance
Claims up to this amount are self-insured through the Group’s
rates.
coverage against increases in frequency and/or severity
Liability insurance 1.5.2
for the lower tranches of coverage.
legally held liable. This program comprises several programs
and property damage claims for which the Group would be
A program provides coverage for third-party personal injury
limit of €100 million. Subsidiaries situated in the geographical
The first program covers all subsidiaries and has a coverage
deductible of USD 50 million. The program’s exclusions are
territory of the United States and Canada Delegation have a
consistent with market practice and concern in particular
potentially carcinogenic substances and gradual pollution.
proves inadequate.
issued in Paris, which can be activated when local coverage
In order to satisfy local regulatory requirements, a policy is
presence. Local policies are backed up by the master policy
taken out in each country in which the Group has a significant
geographic area covered by the United States and Canada
The second program covers subsidiaries located in the
program is structured differently to deal with the specific
Delegation and has a coverage limit of USD 50 million. This
consequential loss.
on the London insurance market. Exclusions are in line with
several lines of coverage, requiring it to be placed, if needed,
concern contractual liability, pollution and third-party
current market practice in the United States and primarily
nature of liability risks in the United States. It is divided into
In addition to the two programs described above, a number
bring the total coverage limit to a level considered
of supplementary programs have been set up in order to
compatible with the Group’s businesses.
self-insurance. The Group also runs a risk prevention program
by assuming a deductible that does not, however, constitute
Health and Safety Department.
at its operating units with the support of the Environment,
of liability risks, and the units are motivated to control costs
Within the operating units, action is taken to raise awareness
Exceptions 1.5.3
Joint ventures and companies not controlled by the Group
separate insurance coverage.
are excluded from the above programs and purchase