Allianz loses bid to end Vivid cladding claim under latent defects policy

• The Court of Appeal dismissed Allianz's appeal against a refusal of summary judgment on Vivid Housing's latent defects claim over fire safety defects at a Portsmouth block of flats.
• Whether the defects caused "the threat of imminent destruction or physical damage" is a question of fact and degree for trial, the court said. It made no finding on whether the policy pays.
• The court said it is "at least a tenable submission" that a waking watch is a remedial step. Allianz did not rely on the policy's fire exclusion, but only for this application.

The Court of Appeal dismissed Allianz Global Corporate & Specialty's appeal on 3 November, upholding the refusal of summary judgment on Vivid Housing's fire safety defects claim without deciding whether the policy responds.

The ruling matters for any warranty or latent defects wording that pays for a threat of damage rather than damage itself. Allianz argued that the insured peril could not be triggered by passive fire safety defects unless something made a fire imminent. The court said that question cannot be settled without a trial.

In Vivid Housing Ltd v Allianz Global Corporate & Specialty SE [2026] EWCA Civ 1389, Stuart-Smith LJ, with whom Peter Jackson LJ and Phillips LJ agreed, upheld a December 2025 decision of Jefford J in the Technology and Construction Court. Vivid is in effect the insured under a Housing Warranty Insurance Policy issued by Building LifePlans Ltd as cover-holder under a binding authority granted by Allianz, according to the judgment.

Clause 3(a)(iii) covers "the threat of imminent destruction or physical damage to the Premises which requires immediate remedial measures for the prevention of destruction or physical damage within the Period of Insurance". The period ran from May 2008 to May 2020, and Vivid notified the claim on or about 19 May 2020. The defects alleged include Rockpanel cladding used with combustible insulation on a building over 18m high, and missing vertical and horizontal cavity barriers. For the application, the defects were assumed to exist.

The court said the trial judge had correctly applied the test from Gerling v Canary Wharf: whether damage is "sufficiently likely to happen sufficiently soon that it should be described as imminent", which is "a question of fact and degree". Her finding that Vivid had a real prospect of success "cannot be overturned on this appeal", it said.

Allianz also pointed to Vivid's claim form, which answered "N/A" when asked about urgent repairs and listed a "Waking Watch" as preventative work already done. The court said the notification was "not determinative", and that a fire risk assessment by CBRE had rated the absence of compartmentation as a red, critical issue. "It is at least a tenable submission that adopting a waking watch is a remedial step, given that it reduces the risk of spread of fire," Stuart-Smith LJ said. These were "paradigm matters for resolution at a trial".

Two limits apply. Allianz did not rely on clause 4(a)(iv), which on its face excludes threatened damage arising from fire, "for the purposes of this summary judgment application but only this application", the judgment records. And Jefford J dismissed only the majority of Allianz's application: she found Vivid's case had no real prospect of success on one of the alleged defects, which was not in issue in the appeal.

Related coverage: Hot-works precautions in liability wording are absolute, High Court rules, Home subsidence claims hit record 13,000 in third quarter, ABI says.

Sources

• Vivid Housing Ltd v Allianz Global Corporate & Specialty SE [2026] EWCA Civ 1389, judgment handed down 3 November 2026 (The National Archives, Find Case Law)
• Vivid Housing Ltd v Allianz Global Corporate & Specialty SE [2025] EWHC 3315 (TCC) (The National Archives, Find Case Law)

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