GECINA - REFERENCE DOCUMENT 2017

RISKS Risks

one of the Group’s properties should have little impact on its financial situation. Indeed, cover has been set at levels that would easily cover a major claim for the largest property of the Group. Gecina benefits from a Group insurance program that covers damage to its property holding, including that caused by natural events, acts of terrorism and attacks, claims by neighbors and third parties, loss of rental income, and consequential losses and indemnities. The program also covers replacement value as at the day of the loss. The property portfolio is covered up to its brand-new value with a Limit of Indemnity (LOI) of €150 million, with the exception of seven assets (large office or residential buildings) which are covered by LOIs of €300 million and three office assets acquired in 2015 which benefit from an LOI of €600 million. Property damage and casualty policies include building owner third-party liability and environmental risks. The general exclusions common to the insurance market as a whole ( e.g. acts of war, damage consequential to the possible presence of asbestos, etc.) normally apply to the coverage taken out by Gecina. The insurance program for buildings also includes construction insurance, namely, primarily contractor’s liability insurance (in France Dommages Ouvrages or DO), in accordance with the Spinetta Law 78-12 of January 4, 1978, and all construction risks insurance. A master agreement signed with Allianz, through the firm Marsh, provides all construction risks, contractor’s liability and promoter ( Constructeurs Non Réalisateurs ) coverage to all construction sites for up to €15 million. For works entailing sums greater than €15 million, contracts are negotiated and concluded on a case-by-case basis. liability The consequences of bodily, material and immaterial third-party liability due to employee malpractice or flawed professional work are insured under a Group policy. Mandatory coverage for professional third-party liability of subsidiaries whose activities come under the Hoguet Law is incorporated into the Group’s civil liability program. The program was renewed for three years on January 1, 2018. General and professional third-party 6.1.8.2

INSURANCES 6.1.8 Gecina’s approach to insurance (including for the Eurosic portfolio acquired in 2017) is primarily intended to protect its assets and to protect it against any liabilities incurred. It is focused on assuring the Group’s long-term viability faced with various risks, reducing the costs of these risks when they occur, constant improvement of guarantees and management of indemnification flows, and providing quality service to tenants. The main risks for which Gecina has taken out insurance coverage are property damage and consequent loss of rents, construction risks and civil liability as a property owner and real estate professional. The insurance program consists of four distinct parts: Insurance for developed real estate assets, including Property Owners Liability (POL/RCPI); construction insurance (contractor’s liability insurance and job site insurance); third-party liability (general and environmental); and other policies (vehicles, staff travel, comprehensive IT risks, fraud and malicious intent, etc.). To ensure that there is adequate coverage and management of the major risks, the Group has traditionally given preference to high levels of coverage with deductibles, enabling it to keep insurance costs down. Cover for damage to properties and/or loss of use and POL account for the bulk of the budget, because of its strategic importance to the Group in terms of risk management. These risks are insured in a program that covers Gecina as well as all its subsidiaries or partnerships with leading insurers, principally Chubb and AXA, Allianz and Liberty Mutual, through its insurance brokers, Assurances Conseils, Siaci Saint Honoré, Marsh and Bessé. In addition, in commercial leases Gecina favors a mutual waiver of appeal to facilitate the management of claims and reduce its frequency risk and that of its insurers. There is no captive insurance company in the Group.

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Coverage of damage and liabilities

6.1.8.1

associated with properties

Because of the geographic dispersion of the Group’s assets and its custom insurance coverage, a major claim affecting

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GECINA - REFERENCE DOCUMENT 2017