Derichebourg // 2020-2021 Universal Registration Document

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Risk factors and internal control Insurance

Insurance 2.2

Main insurance programs The Group’s insurance policy is based on more than 10 programs including the following main policies: General Public Liability Insurance: covering third-party criminal and contractual liability incurred by the Group in the event of personal injury or material and intangible damage likely to arise in the course of business operations or after delivery; Specific Public Liability Insurance for pollution risks; Aviation Public Liability Insurance; Property Damage Insurance: covering direct accidental and sudden material damage to the insured property. This insurance operates as a second line after captive reinsurance; Vehicle Fleet Insurance: working from a common base, these are essentially policies adapted to the needs of local regulations; Transport Insurance: covering claims arising from maritime, rail and ground transportation between the Group’s plants and its customers; Charterer Insurance; Ten-Year Insurance for all building-related activities; Directors’ Liability Insurance; Workers’ Compensation Insurance, to cover work-related accidents and illness; this system is specific to the United States; Cyber/Fraud Insurance, covering extortion requests, data security, computer system availability, fraud and forgery; Credit Insurance, under the responsibility of the Group Finance Department. At September 30, 2021, the total amount of premiums, for all policies was €11.6 million.

The Group is particularly conscious of the need to prevent risks and allocates significant resources and a considerable budget to training, site security and a range of programs covering prevention, protection, security, health and the environment. This risk management nevertheless also includes taking out insurance policies with financially sound international insurance companies. It is the responsibility of the Group’s Insurance Department, which is managed by the parent company, to identify the risks, for each business sector, define the correct balance between insurance requirements and guarantees to be entered into, as well as the acceptable levels of policy excesses and ceilings. This is why the decision was taken, from an economy of scale perspective, to negotiate policies at central level. Consequently, all Group entities are covered by so-called “master” insurance policies that are translated into local policies in accordance with the regulations and risks identified locally. Similarly, the Insurance Department uses “master” underwriters that act as the conduit to local underwriters in the countries where the Group operates. In this way, the Group guarantees harmonization and an optimum level of security in its insurance policies, which it reviews whenever necessary, on the basis of information fed back by subsidiaries and claim monitoring. This takes place on at least an annual basis. The insurance market has been particularly hostile to property damage risks, particularly in the recycling and waste management sector, given the large number of fires that have occurred on general “Waste” sites. Often these sites are not in the same type of business as the Group. Due to its maturity and proactive investment in prevention policy, which has been in place for more than three years, the Derichebourg Group has been able to maintain insurance cover with its long-standing insurer. Nevertheless, the conditions have been more stringent with high deductibles, for a reduced level of cover. Faced with this market downturn, the Group set up a reinsurance captive (Derichebourg Ré) based in Luxembourg, pending the alignment of French law with the tax arrangements specific to this alternative insurance scheme. With this in place, it is now able to reduce its dependency on the property damage insurance market, which enables it to reduce its premiums, control its risk, enhance its prevention and optimize retention.

DERICHEBOURG 2020/2021 Universal Registration Document 46