APC 2013 Annual Report Download - page 47

OVERVIEW OF THE GROUP'S STRATEGY, MARKETS AND BUSINESSES
RISK FACTORS
referred Schneider Electric IndustriesSAS and 13 other French Various other claims, administrative notices and legal
companies to the criminal court. proceedings have been filed against the Group concerning such
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issues as contractual demands, counterfeiting, risk of bodily
Following a request for judicial review issued by the company harm linked to asbestos in certain older products and work
ErDF against Schneider Electric in July2012 regarding a contracts.
potential defect designated “soft button” (non-reset) affecting
connection breakers (DB90) produced between1990 and2010, Although it is impossible to forecast the results and/or costs of
in the framework of conventional mediation to seek a negotiated these proceedings with certainty, Schneider Electric considers
end to this situation, the Group is in discussions with ErDF, that they will not, by their nature, have significant effects on the
based on the results of a reliability testing campaign carried out Group’s business, assets, financial position or profitability. The
in 2012 and 2013 with the objective of a statistical determination company is not aware of any other governmental, court or
of the number of DB90s affected by this potential defect, as well arbitration proceedings, which are pending or which threaten the
as the product failure rate. Whether this case is settled amicably company, that are liable to have or, during the last 12months
or in court, the resulting costs could have a significant impact for have had, a material effect on the financial position or profitability
the Group. of the company and/or the Group.
Insurance policy
Schneider Electric’s general policy for managing insurable risks is Liability insurance
designed to defend the interests of employees and customers A new insurance program offering coverage and limits in line with
and to protect the company’s assets, the environment and its the current size of the Group and its evolving risks and
shareholders’ investment. commitments was established on January1, 2012, for a period
This strategy entails: of three years.
identifying and analyzing the impact of the main risks;
lCertain specific risks, such as aeronautic and environmental risk,
preventing risks and protecting industrial equipment; definition
lare covered by specific insurance programs.
and dissemination of protection standards for sites (including
Property damage and business interruption
when those are managed by third parties) against the risk of
fire and malicious intent, audits of the main sites by an
independent prevention company, roll-out of a insurance
self-assessment questionnaire for the other Group sites; The global insurance program put in place on July1, 2012 was
drawing up of business continuity plans, in particular for critical
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renewed as of July1, 2013 for a duration of two years. This is an
sites; “all risks except” contract which covers events that could affect
roll-out of crisis management tools by the Group’s Security
lSchneider Electric’s property (including fire, explosion, natural
Department; disaster, machinery breakdown) as well as business interruption
carrying out hazard and vulnerability studies and safety
lresulting from those risks. The EUR350million cap on
management for people and equipment; settlements under the global plan capped at per claim has been
maintaining a comprehensive policy to cover main risks by
lincreased for the largest sites. Certain guarantees in particular,
implementing global insurance programs negotiated at the natural disasters and machinery breakdown have lower
Group level for all subsidiaries with insurers meeting the insurance caps. These limits were determined on the basis of
criteria for financial position recognized by insurance and available capacity on the market, loss scenarios prepared by the
reinsurance players; prevention company that carries out the audits of our industrial
optimization of financing for frequent, low amplitude risks
lsites and, for earthquake risk, modelling carried out by
through retentions managed either directly (deductibles) or specialized companies.
through captive insurance companies. Assets are insured at replacement value.
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2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC