40.15  Consequences of Unavailability of Insurance Terms

If it is agreed or determined that clause 40.14 applies:

(a)  then the Authority shall waive the Service Provider's obligations in clause 40.1 and/or Schedule 18 (Insurance Matters) in respect of that particular Insurance Term and the Service Provider shall not be considered in breach of its obligations regarding the maintenance of insurance pursuant to this Agreement as a result of the failure to maintain insurance incorporating such Insurance Term for so long as the relevant circumstances described in clause 40.14 continue to apply to such Insurance Term;

(b)  to the extent that the parties agree (acting reasonably), or it is determined pursuant to the Dispute Resolution Procedure, that an alternative or replacement term and/or condition of insurance is available to the Service Provider in the worldwide insurance market with reputable insurers of good standing which, if included in the relevant insurance policy, would fully or partially address the Service Provider's inability to maintain or procure the maintenance of insurance with the relevant Insurance Term, at a cost which contractors in the UK are (at such time) generally prepared to pay, the Service Provider shall maintain, or procure the maintenance of, insurance including such alternative or replacement term and/or condition.  Notwithstanding any other provision of this Agreement, the costs of such insurance shall be subject to the premium costs sharing mechanism set out at Part 5 of Schedule 18 (Insurance Matters).

(c)  where the Authority has exercised the waiver pursuant to clause 40.15(a), it shall be entitled to deduct from the annual Service Payment the Adjusted Amount, such amount being an amount equal to the amount paid for the particular Insurance Term in the preceding year (using a reasonable estimate of such amount where a precise figure is not available) less any annual amount paid or payable by the Service Provider to maintain and/or procure the maintenance of any (whether full or partial) alternative or replacement insurance in respect of such Insurance Term pursuant to clause 40.15(b);

(d)  where clause 40.14 applies, the annual Service Payment shall be reduced each Contract Year by the Adjusted Amount, Indexed from the date that the particular Insurance Term is no longer available;

(e)  the Service Provider shall notify the Authority as soon as reasonably practicable and in any event within five (5) Business Days of becoming aware that clause 40.14 is likely to apply or (on expiry of the relevant insurance then in place) do apply in respect of an Insurance Term (irrespective of the reason for the same).  The Service Provider shall provide the Authority with such information as the Authority reasonably requests regarding the unavailability of the Insurance Term and the parties shall meet to discuss the means by which such unavailability should be managed as soon as it is reasonably practicable;

(f)  in the event that clause 40.14 applies in respect of an Insurance Term, (irrespective of the reasons for the same) the Service Provider shall approach the insurance market at least every four (4) months to establish whether clause 40.14 remain applicable to the Insurance Term.  As soon as the Service Provider is aware that clause 40.14 has ceased to apply to the Insurance Term, the Service Provider shall take out and maintain, or procure the taking out and maintenance of, insurance (to be incepted as soon as is reasonably practicable) incorporating such Insurance Term in accordance with this Agreement.