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3Risk managementInsurance coverageInsurance coverageSequana has set up worldwide insurance programmes to providecoverage against its main business-related risks (accidental damageto buildings, equipment, finished and semi-finished goodsand raw materials; the financial consequences of civil liabilityarising from the Group’s operations or from physical injuryand material and consequential damage caused to third parties;and claims arising from the professional travel commitments ofemployees and executives).The main insurance policies have been taken out in Sequana’sname and provide coverage for all of the subsidiaries in most ofthe countries in which the Group does business. This means thatthe entire Group now enjoys similar insurance coverage and thesame level of guarantees.The principal insurance cover contracted is as follows:■■insurance for damage to buildings (including production andstorage units) and their contents (manufacturing materials,IT equipment, sundry equipment, inventories, etc.) providingcoverage representing the amount of the loss likely to beincurred;■■insurance against business interruption arising from propertydamage;■■insurance to cover physical injury and material and consequentialdamage caused to third parties and involving the civil liabilityof Sequana or its subsidiaries: business and product liability;■■insurance covering claims arising from the professional travelcommitments of employees and executives;■■insurance covering damage to goods in transit;■■insurance against fraud and malicious damage.All of these polices have been taken out with major internationalinsurers.Sequana considers that the insured coverage reflects the type ofrisks incurred by the Group as well as comparable cover availableon the market for companies of similar size that are engaged insimilar business activities.In accordance with standard insurance practices, these are “Allrisks with exceptions”-type policies and they provide for exclusions,loss limits for certain risks defined on a plant-by-plantbasis, such as equipment breakdown, poor supplier performanceor substandard service, natural catastrophes, pollution, IT incidents,and acts of terrorism, adapted to the amount and risks coveredfor each business.Sequana has also deployed a prevention programme – in liaisonwith its brokers and insurers – for the purpose of reducing boththe risk of damage to property and business interruption risk.The Group has also taken out directors’ and corporate officers’liability insurance.In order to ensure that it pays competitive premiums for appropriatelevels of coverage, Sequana puts these insurance policiesout to tender every two or three years.Sequana has a captive insurance entity that it uses to optimisefinancing of the risk of damage to property and business interruptionrisk. The captive entity reinsures any claims by Arjowiggins/Antalis for an annual net-of-excess amount of €1.5 million perclaim and €3 million per loss year.For reasons of confidentiality, and due to the structural complexityof the policies in question, the Group does not consider itappropriate to disclose a breakdown of the costs and coveragelevel for each of the insured risks.However, the following table sets out the amounts covered for themain risk areas.(€ millions per claim per annum) Sequana GroupProperty damage and business interruption 450Civil liability 65To the best of the Company’s knowledge, the Group is notexposed to any specific risks – such as serious labour disputes –other than those customarily inherent in any industrial or commercialactivity (chapter 6, Environmental policy on page 207).84 | Sequana | 2012 Document de référence (English version)