If previously available terms and conditions of insurance are unavailable at the time of policy renewal for the Contractor, and that unavailability is not caused by the Contractor or its Sub-Contractors, then a process is needed to allow the parties to determine the appropriate response
Under the WIDP Contract (Clause 58.1.6) the Contractor is required to alert to the Authority the unavailability of the insurance term or condition. The Authority can ask for additional information relating to that unavailability. There is then a requirement for the Authority to meet with the Contractor to discuss how best to manage the situation.
Where there is such unavailability, the WIDP Contract (Clause 58.1.2) requires the Authority to waive the Contractor's contractual obligations in respect of that particular insurance term or condition. The Contractor cannot be held to account under a breach of Contract claim for its failure to secure insurance incorporating that particular term or condition.
The WIDP Contract (Clause 58.1.3) sets out a test for the availability of alternative or replacement insurance. If that test is met, the Contractor must take out insurance on those alternative or replacement terms. The premium costs sharing mechanism at Part 5 of Schedule 10 would then apply.
The Contract Manager should be aware the Authority is entitled to make a deduction from the annual Unitary Charge which takes account of this change in cover, applying the approach described at Clause 58.1.4. The Authority may make similar deductions for later Contract Years while the unavailability of the term or condition continues (Clause 58.1.5).
The Contractor is required to be proactive in monitoring the insurance market at least once every four months to check the continued unavailability of the term or condition (Clause 57.3.1). As soon as the required term or condition becomes available again, the Contractor must ensure such insurance is put in place as envisaged by the WIDP Contract.