17.11.1 Authorities will need to produce a schedule to their contracts setting out the Authority's Required Insurance requirements in a Required Insurance Schedule ("RIS") (see, for instance Annex 1 to the former Standardisation of PFI Contracts Version 4 March 2007 at www.hm-treasury.gov.uk).
17.11.2 This should be determined by the Authority in conjunction with its insurance adviser, to ensure that the provisions in the insurance schedule are tailored to the requirements of each Project, for example, project specific details might include:
• insertion of an appropriate limit of indemnity for the third party liability policies;
• a change to the period of insurance in the event that service commencement is phased, or construction extends beyond service availability date, e.g. a multi-site facility;
• addition or deletion of project specific extensions and relevant footnotes;
• inclusion of additional insurance cover where appropriate;
• insertion of a figure for each maximum deductible; and
• change to the jurisdiction and/or territorial limits under the third party liability policy.
17.11.3 In addition to the project-specific amendments, the drafting may to some extent need to be amended to reflect the availability of insurance generally, including the main terms and conditions in the prevailing insurance market.
17.11.4 For the reason given in Section 17.2.2 (Authority's Requirements), professional indemnity insurance should not be included as a Required Insurance. Additional reasons for excluding this insurance from the Required Insurances include the following:
• it will not be possible for the Authority to be named as an additional insured and thus benefit directly from the insurance policy; and
• when placed on a project specific basis this tends to be very expensive and provide only limited additional comfort to the insured party.
17.11.5 Maximum deductibles should primarily be set at a level which reflects the maximum level of exposure which an Authority is reasonably able to bear for any of its own losses and which the Contractor could bear for its own losses. The main determinant should not be the lowest deductible limit available in the prevailing market. For many projects it is anticipated that the maximum deductible could be higher than that which is available in the prevailing market.
17.11.6 Section 17.9.1 (Risks that become Uninsurable) states that uninsurability protection is intended to apply to risks only (rather than the availability of cover upon particular terms or conditions). The risks which benefit from uninsurability protection are those which are covered by the Required Insurances and any other risks covered by statutory insurance. If a risk is Uninsurable and the uninsurability test in Clause 17.9 (Uninsurable Risks) is satisfied, the Authority may, on the occurrence of a loss (or, in respect of third party liability at the time that the risk becomes Uninsurable) terminate the Contract and pay compensation to the Contractor equivalent to an amount payable on a Force Majeure termination in accordance with Clause 17.9(b)(i) and (ii) (Uninsurable Risks). This payment will therefore not represent "full" compensation as equity repayment will be limited to par value less Distributions paid to date. This provision serves to control the extent to which uninsurability protection is relied upon.