66.3  Consequences

66.3.1  If the requirements of clause 66.2 (Risks Become Uninsurable) are satisfied, but the parties cannot agree as to how to manage or share the risk, then:

(a)  in respect of such third party liability insurance only, the Authority shall (at the Authority's option) either pay to the Contractor an amount equal to the amount set out in clause 52 (Compensation on Termination for Force Majeure) and this Agreement will terminate or elect to allow this Agreement to continue and clause (b) below shall thereafter apply in respect of such risk;

(b)  in respect of such contractors' all risks insurance, material damage, property damage, delay in start  up, third party liability insurance (if relevant) business interruption (but not loss of profits) or statutory insurances this Agreement shall continue and on the occurrence of the risk (but only for as long as such risk remains Uninsurable) the Authority shall (at the Authority's option) either pay to the Contractor an amount equal to insurance proceeds that would have been payable had the relevant insurance continued to be available and this Agreement will continue, or an amount equal to the amount set out in clause 52.1 (Compensation on Termination for Force Majeure) plus (in relation to third party liability insurance only) the amount of insurance proceeds that would have been payable to the Contractor whereupon this Agreement will terminate;

(c)  where pursuant to clauses 66.3.1(a) and/or (b) this Agreement continues then the Unitary Charge shall be reduced in each Contract Year for which the relevant insurance is not maintained by an amount equal to the premium paid by the Contractor in respect of the relevant risk in the Contract Year prior to it becoming Uninsurable (indexed from the date that the risk becomes Uninsurable).  Where the risk is Uninsurable for part of a Contract Year only the reduction in the Unitary Charge shall be pro rated to the number of months for which the risk is Uninsurable;

(d)  where pursuant to clauses 66.3.1(a) and/or (b)of this Agreement continues the Contractor shall approach the insurance market at least every four (4) months to establish whether the risk remains Uninsurable.  As soon as the Contractor is aware that the risk is no longer Uninsurable, the Contractor shall take out and maintain or procure the taking out and maintenance of insurance (to be incepted as soon as is reasonably practicable) for such risk in accordance with this Agreement.189

66.3.2  If pursuant to clause 66.3.1.2 (Consequences), the Authority elects to make payment to Contractor (such that the Agreement will terminate) ("the Relevant Payment") the Contractor shall have the option (exercisable within twenty (20) Business Days of the date of such election by the Authority) (the "Option Period") to pay to the Authority on or before the end of the Option Period an amount equal to the insurance proceeds that would have been payable had the risk not become Uninsurable in which case this Agreement will continue (and the Relevant Payment will not be made by the Authority) and the Contractor's payment shall be applied for the same purpose and in the same manner as insurance proceeds would have been applied had the relevant risk not become Uninsurable.

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189 Additional sub-clauses (v) and (vi) may be added at the Authority's discretion as follows:

(v) in respect of any period between the Authority receiving notification in accordance with Clause 66.2 that a TPL Risk has become Uninsurable and the Authority's notification to the Contractor in accordance with Clause ** in respect of such risk then, provided it is ultimately agreed or determined that the requirements of Clause ** are satisfied in respect of the Uninsurable TPL Risk and subject to Clause ** below.  Clause ** shall apply in respect of occurrences of the Uninsurable TPL Risk during such period unless the parties otherwise agree how to manage the risk during this period.