Insurance Daily News

Allianz Appeal Fails in Dispute Over Fire Defect Policy

The Court of Appeal has dismissed an appeal by Allianz Global Corporate & Specialty SE, ruling that a dispute regarding passive fire safety defects in a Portsmouth residential block must proceed to a full trial. The decision, issued on November 3, 2026, prevents the insurer from securing an early dismissal of the claim brought by Vivid Housing Limited.

The case centers on a 72-flat building at Collins Place, which is covered by a Housing Warranty Insurance Policy issued by Building LifePlans Ltd on behalf of Allianz. The policy, active from May 2008 to May 2020, includes a clause covering repair costs for defects that present a threat of imminent destruction or physical damage requiring immediate remedial action.

Vivid Housing Limited filed a claim just before the policy expired in May 2020, citing a fire risk assessment conducted by CBRE. The report identified several critical defects, including combustible Rockpanel cladding, missing vertical cavity barriers, and missing or defective horizontal cavity barriers. CBRE categorized the lack of compartmentation as a critical issue, noting it created a pathway for fire to spread through wall cavities.

Allianz argued that the policy only triggers if there is an imminent threat of a fire actually starting. The insurer contended that passive defects, while potentially dangerous, do not meet this threshold. Allianz also pointed to the fact that Vivid had marked “N/A” on its claim form regarding the need for urgent repairs, though the housing provider had implemented a waking watch as a preventative measure.

The Technology and Construction Court previously rejected Allianz’s request for summary judgment in December 2025. That court applied a legal test asking whether a reasonable observer would view the potential damage as sufficiently likely to occur soon enough to warrant action. The lower court reasoned that requiring proof of an imminent ignition would render the policy practically useless for fire-related defects.

In its ruling, the Court of Appeal agreed that the lower court applied the correct legal standard. The appellate judges noted that while Allianz’s interpretation of the word “imminent” was not inherently unreasonable, the question of whether the fire risk was sufficiently serious and likely to occur remains a matter of fact and degree. Consequently, the court determined that such issues are best resolved through a full trial rather than a summary judgment application.

The litigation will now move forward to determine whether the defects at the Collins Place property satisfy the specific wording of the insurance policy. Vivid Housing Limited has indicated plans to expand its evidence regarding fire risk beyond the initial CBRE report and existing portfolio data.

Why it matters

This ruling limits the ability of insurers to dismiss passive fire defect claims early, establishing that the interpretation of 'imminent' risk in fire safety contexts is a factual matter for trial.

FAQ

What specific defects were identified at the Portsmouth property?
The CBRE assessment identified combustible Rockpanel cladding with combustible foam insulation, missing vertical cavity barriers, missing or defective horizontal cavity barriers, and construction debris inside building cavities.

What was the core disagreement regarding the policy wording?
The dispute focused on the term 'imminent.' Allianz argued the policy only covers threats where a fire ignition is imminent, while the court considered whether the risk of damage from existing defects was sufficiently likely to occur.

Did the court rule that the defects were covered by the policy?
No. The Court of Appeal did not decide if the defects satisfy the policy wording; it only ruled that the case must proceed to a full trial to resolve that question.

Source: Insurance Business UK. See the original source for full details.