Insurance

INTRODUCTION

DRUM Commodities provides integrated supply chain solutions across Africa. Since January 2006, we have managed $3.0 billion worth of commodities and now have subsidiaries in 12 African countries that provide a footprint for all our sub-Saharan operations.

DRUM’s principal services are contracted as “Collateral Management Agreements” (CMA) or “Stock Monitoring Agreements” (SMA), usually tri-partite between the lender, borrower and DRUM.

Any CMA is pre-ceded by due diligence and inspections (site / warehouse / tank farm, supply chain or petroleum tanks). The aim of these inspections is to satisfy the requirements for Lloyds of London insurance, provide a scope of services and derive a set of costs.

The insurance products behind each DRUM CMA and SMA, protecting DRUM or their Clients, are detailed below:

1. LEGAL & CONTRACTUAL LIABILITY COVER FOR GOODS UNDER MANAGEMENT

The insurance policy allows DRUM to offer their clients a full indemnity for any action or inaction by DRUM directly attributing to or causing a physical loss, including any negligence, fraud, misconduct, omission, wilful default or breach of contract by DRUM’s employees in their performance of the services

Indemnity Value: Full value of the Goods under Management, not exceeding US Dollars 15 million at any one location. The limit can be increased subject to specific agreement with the Underwriters.

2. PROFESSIONAL INDEMNITY

The policy protects DRUM against claims for any error or omission in its written reports, including any damages arising out of libel or slander, breaches of confidentiality, loss of documents, inaccuracies in stock reports or statements, incurred as a consequence of DRUM’s negligence, omission, misconduct or breach of contract, allowing DRUM to indemnify their clients for any financial loss arising from such a failure.

Indemnity Value: GBP 10 million / USD 16 million.

3. PUBLIC LIABILITY

The policy covers DRUM against claims made against them, where DRUM cause damage to third party equipment (including warehouses or other storage facilities) whilst loaned / occupied / utilised by DRUM.

Indemnity Value: GB£ 2 million.

4. CARGO (STOCK LOSS) INSURANCE

This Policy will be tailored by our Lloyds of London broker, the RFIB Group (see ‘www.rfib.com), to protect DRUM’s clients against all risks of physical loss of or damage to the goods.

The policy will be designed to be seamless and provide coverage from Origin to Destination ensuring there are no gaps in cover.

Policy Limit: US Dollars ‘to be agreed’ for any one warehouse location / any one transit.

Preferential rates are offered to DRUM’s Clients who are under the security umbrella of a DRUM Collateral Management Agreement.

RFIB provides a first class service for all aspects of Loss Prevention and Claims’ Handling.

5. POLITICAL RISKS INSURANCE

This Policy protects DRUM’s clients against the risks of loss to their Goods following:

5.1 Governmental expropriation or confiscation of the Goods;

5.2 Deprivation: the inability to export the Goods due to the cancellation of an export licence or the failure to obtain an export licence which was obtainable at the inception of the policy; and

5.3 Physical loss or damage to the Goods caused by Political Violence e.g. War, Civil War, Revolution, Terrorism, Sabotage, Strikes, Riots and Civil Commotion.

Policy Limit: US Dollars 15 million and this limit may be increased if required by specific agreement of the Underwriters.

Preferential rates are offered to DRUM’s Clients who are under the security umbrella of a DRUM Collateral Management Agreement.

This policy is also brokered directly between DRUM’s Lloyds of London broker, RFIB, their Underwriters and the Customer.

SUMMARY

DRUM’s clients have full recourse against DRUM in the event of a failure of their performance of the services.

For Cargo and Political Risks insurance, DRUM clients have fast access to Lloyd’s of London insurance, at beneficial terms and conditions, through DRUM’s appointed broker, RFIB.