PERNOD RICARD - Universal Registration Document 2019-2020

4. RISK MANAGEMENT Insurance and risk coverage

Insurance and risk coverage 4.3 For Pernod Ricard, insurance is a solution for the financial transfer of major risks facing the Group. This transfer is accompanied by a policy of prevention to reduce risk as much as possible. The Group evaluates its risks with care in order to fine-tune the level of coverage of the risks it incurs. 4.3.1 In order to cover the main risks, Pernod Ricard has set up international insurance programmes for all Group affiliates, barring exceptions due to local regulatory constraints in certain countries or as a result of more attractive conditions offered by the local market. These programmes provide the following coverage: property damage and business interruption losses; — operating/product liability, including costs and losses incurred by the — Group due to accidental and/or criminal contamination; environmental liability; — Insurance policies

The Group has two types of coverage: Group insurance programmes and local policies. The programmes at Group level are monitored by those who coordinate the insurance and risk management policy, and also by a person in charge of monitoring industrial risk prevention.

Directors’ civil liability; — damage during transport (and storage); and — fraud/cyber security. — Moreover, credit insurance programmes are in place, aimed at reducing the risks associated with trade receivables. Some affiliates have contracted additional insurance to meet ad hoc needs (for example, vineyard insurance, car fleet insurance, etc.).

Coverage 4.3.2

Type of insurance

Coverage and limits on the main insurance policies  (1)

Damage to property and operating losses

Coverage: fully comprehensive (except exclusions). — Basis of compensation: —

replacement value for moveable property and real estate, except for certain affiliates, — which have exceptionally chosen, with the contractual agreement of the insurers, to provide for another basis of compensation; cost price for inventories, except for certain maturing inventories that are insured at — replacement value or net carrying amount plus a fixed margin (tailored to each company); and business interruption losses with a compensation period generally between 12 — and 36 months depending on the Company. Limits on compensation: — main compensation limit of €1.05 billion, covering all damage and business interruption — losses. The programme includes additional limits, for example to cover natural events; and Furthermore, a captive insurance company provides insurance coverage for an amount — of €3 million per claim with a maximum commitment of €5 million per annum. Fully comprehensive coverage (except for exclusions) for damage caused to third parties — for up to €220 million per year of insurance. Coverage taken out under the general civil liability programme for recall expenses, the cost — of the relevant products, business interruption and outlay on rebuilding Pernod Ricard’s image following accidental or criminal contamination of products that could endanger persons or property: coverage of up to €45 million per year.

General civil liability (operating and product liability)

Product contamination

General environmental liability

Coverage for environmental damage of €30 million. —

Directors’ civil liability

Coverage of up to €150 million per year of insurance. —


Coverage of up to €20 million per claim. —

Fraud/cyber security

Coverage of up to €35 million per year, with a cyber-insurance sub-limit of €20 million. —


Coverage differs depending on the affiliate and the programme, with total cover rising to — a maximum of €180 million. It can also be partially transferred under a programme to sell receivables.

The figures shown are the main limits for the year ended 30 June 2020. Changes have been negotiated for FY21. Some contracts provide specific limits for certain aspects (1) of coverage.


Pernod Ricard Universal Registration Document 2019-2020

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