This excerpt taken from the ACL 20-F filed Mar 15, 2005.
We have in the past self-insured through our captive insurance subsidiaries some of our business risks. Effective March 31, 2005, we will self-insure through our captive insurance subsidiaries almost all of our property and casualty, business interruption and liability risks and will discontinue third-party coverage.
The pharmaceutical and medical device business involves an inherent risk of product liability and any claims of this type could have an adverse impact on us. Furthermore, we have all of the risks for property and casualty, general liability, business interruption and environmental liability exposures that are typical of a public enterprise with manufacturing and marketing activities. Historically, we have relied on a combination of self-insurance through our captive insurance subsidiaries and third-party insurance to cover potential claims from these risks. Effective March 31, 2005, except for
fiduciary liability and officers and directors liability insurance, we no longer purchase any form of insurance against these risks for Alcon and its subsidiaries from third-party insurers. We have taken, and will continue to take, what we believe are appropriate measures to protect ourselves from possible adverse consequences of these risks. Though our insurance coverage and cash flows have been adequate to provide for liability claims in the past, future liability claims and other losses from these risks could exceed our insurance coverage limits for past activities and future cash flows, and any significant losses from these risks could have a material adverse effect on our financial condition.