You won't need to pay the final payment IF you do not have the damaged bike any more. Been there done that - one bike was stolen a month or two before the end of my contract and it meant that I had no final payment to transfer ownership. However, you can't back out of the 12 month hire contract and must maintain your payments. Not sure how this would work if you retained possession of 'their' bike though.
Your hire contract will not apply to the bike you get via insurance either, so that is instantly yours (not your employers or cyclescheme's) on receipt. Hope that helps.