A Vivid Reminder: Fire Safety Defects Can Trigger Cover
Ten years on from Grenfell, fire safety defects remain one of the defining issues in the built environment. Against that backdrop, the recent decision in Vivid Housing Ltd v Allianz Global Corporate & Specialty SE [2025] offers important guidance on how the courts approach ‘imminent damage’ and reinforces the need for insurers to be part of the solution rather than an obstacle to remediation.
At Fenchurch Law, we have advised on several imminent danger cases, an example being Nova House, Slough – which involved a variety of fire safety and structural issues. The decision in Vivid, which involved an application for summary judgment, sits squarely within this developing line of authority and offers policyholders helpful clarity.
The Policy
The operative clause at the heart of this application is Clause 3(a), which states:
Clause 3(a) Operative Clause
"The Insurers agree to indemnify the Insured against the cost of repairing, replacing and/or strengthening the Premises following and consequent upon a Defect which becomes manifest and is notified to Insurers during the Period of Insurance and not excluded herein causing any of the following events:
(i) destruction of the Premises; or
(ii) physical damage to the Premises; or
(iii) 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 Dispute
Vivid submitted a claim in May 2019, contending that several building safety defects had manifested at the Property, and that they all fell within the Policy's definition of "Defect", thereby triggering the Operative Clause. Allianz denied that contention.
The summary judgment application focused solely on the meaning and scope of sub-clause(iii):
"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 key question here, assuming that there were such “Defects”, was whether there was a risk of imminent damage.
The Defects
- Defect 1 (Rockpanel cladding): Vivid alleged that combustible RP cladding and foam insulation were used on a building over 18m high without proper testing or barriers. It also said that combustible debris in cavities could enable fire and smoke to spread externally.
- Defect 2 (vertical cavity barriers): Vivid contended that required vertical cavity barriers were missing, allowing fire or smoke to spread unnoticed throughout the building.
- Defect 3 (horizontal cavity barriers): Vivid claimed that missing or faulty cavity barriers at party walls, slab edges, and window openings could allow fire and smoke to spread undetected throughout the development.
- Defect 4 (Rockclad bracketry): Vivid states that RP cladding panels were not properly secured to vertical rails, with brackets that were inadequately supported or overstressed, posing a risk of detachment or damage.
- Defect 5 (building debris): Vivid claimed that debris left in building cavities created a fire hazard, facilitated fire spread, and enabled water to enter flats, causing further damage.
Allianz’s Position
Allianz argued that “imminent” required a serious and immediate likelihood of damage occurring soon, which it said was not the case as of August 2019.
In their view, the clause did not cover threats that would materialise only if a non-imminent event occurred, nor extend to circumstances where remedial measures are not immediately necessary to prevent destruction or damage within the policy period.
There was no likelihood of damage occurring soon as at August 2019, Allianz said, because:
(i) Vivid’s response in the notification to whether urgent repairs were required was “N/A.”
(ii) The only measures implemented during the policy period were “Waking Watch” arrangements, which were not intended to prevent property damage.
(iii) No damage occurred during the policy period, despite the absence of remedial works.
Vivid’s Position
Vivid, by contrast, contended that “imminent damage” should be assessed objectively, and that there was no requirement that the destruction or physical damage should happen soon. On its proper construction, they said that sub-clause (iii) applied where a reasonable observer would conclude that there was a realistic prospect of physical damage requiring immediate remedial measures to prevent it.
As to each of the defects, Vivid argued that:
(i) Defects 1, 2, 3 and 5 made the development vulnerable to physical damage in the event of fire, giving rise to a realistic prospect that imminent physical damage might occur. That risk was constant given the frequency of fires, supported by evidence of similar incidents.
(ii) Defect 4 put the cladding panels and bracketry at risk of deformation and detachment, giving rise to a realistic prospect that imminent physical damage might occur.
The Court’s Decision
The Court considered whether the defects created a threat of imminent destruction or damage sufficient to engage the policy.
As to the fire safety defects, the Court held that it could not be said there was no realistic prospect of establishing a serious risk of fire and imminent damage, particularly given the implementation of Waking Watch measures, which reflected an ongoing fire concern. Put differently, the presence of a Waking Watch did not undermine the concern of a present or imminent danger. Quite the opposite, it was that very concern which required the Waking Watch to begin with.
The court emphasised that the policy required not only an imminent threat but also that immediate remedial works are necessary to prevent destruction or damage within the period of cover. Whether this threshold is met is fact-sensitive; typically, imminent threats necessitate immediate repair or mitigation. Temporary measures such as Waking Watch do not negate the need for remedial works.
Ultimately, the court concluded:
"Vivid’s case on the construction of the policy clause and whether the policy responds has a real prospect of success in relation to all Defects other than Defect 4, and the application for summary judgment is refused."
In respect of Defect 4 (Rockclad bracketry), which was unrelated to fire risk, the Court found in Allianz’s favour and granted summary judgment.
For Defects 1, 2, 3 and 5, the Court accepted that the fire‑related risks created a realistic prospect of imminent damage.
ANALYSIS
Why Did the Court Exclude Defect 4?
Defect 4 involved the risk of deformation and detachment of cladding panels and bracketry. Intuitively, one might say this creates a clear risk of physical damage. However, the court held that the defect did not amount to a fire‑related risk and did not require “immediate remedial measures” to avoid destruction or damage within the policy period.
Two nuanced reasons are at play:
- Immediacy: the deformation risk was progressive, not acute.
- Requirement for immediate works: unlike fire safety defects, the defect did not necessitate urgent intervention to avoid catastrophic loss.
This highlights a key theme in imminent danger cases: the immediacy of required remedial work often drives the outcome more than the nature of the defect itself.
Why Vivid Matters
Similar wording has been scrutinised before, most notably in Manchikalapati & others v Zurich Insurance plc & others [2019] (“Zagora”), and the court’s approach in Vivid aligns with and develops that earlier guidance.
In Zagora, the court held that imminence requires a real and present risk, not a remote or hypothetical possibility. Vivid adopts that framework but clarifies how it applies to fire safety defects, emphasising:
- fire events are inherently unpredictable;
- where fire‑related defects exist, the risk of damage is constant; and
- temporary measures (e.g., Waking Watch) do not remove the underlying risk.
CONCLUSION
The decision in Vivid is consistent with previous case law and provides helpful confirmation that:
- Fire safety defects can constitute imminent danger;
- Temporary measures such as Waking Watch do not exclude immediacy;
- The courts will continue to apply the principles developed in Zagora; and
- Insurers must recognise their role in enabling, rather than hindering, fire safety remediation.
For policyholders, the judgment offers helpful reassurance. For insurers, it is a reminder that narrow constructions of imminent danger are increasingly difficult to sustain.
Importantly, policyholders should not be required to wait for an actual fire incident before their insurance coverage becomes applicable. The judgment clarifies that waiting for harm to occur before responding to the risk is both unreasonable and contrary to the purpose of fire safety provisions.
Chloe Franklin is an Associate at Fenchurch Law
PFAS – Out of the Frying Pan into the Court Room?
Fenchurch Law considers the impact of PFAS on the UK insurance sector, following the rise of litigation progressing through the US courts.
What Are PFAs?
PFAS, or Polyfluoroalkyl Substances, also known as Forever Chemicals, are a group of over 10,000 chemicals that do not readily degrade.
These synthetic chemicals have been utilised in products such as non-stick cookware, waterproof clothing and cosmetics since the 1950s for their non-stick, water- and heat-resistant properties. A concerning aspect of PFAS is that they can accumulate indefinitely in the environment and in living organisms. Their highly durable nature has led scientists to investigate the long-term effects of these chemicals on the body and the environment, with alarming results.
Currently, PFAS are linked to several health issues, including immunosuppression and certain types of cancer. Consequently, and unsurprisingly, regulators are now aiming to tighten the regulation of PFAS chemicals to limit ongoing risks.
Regulatory Landscape in the UK
PFAS are currently regulated under the UK REACH regime (Registration, Evaluation, Authorisation, and Restriction of Chemicals). However, only a limited number of specific PFAS are restricted for use in the UK. For example, PFOA (Perfluorooctanoic acid) and PFOS (perfluorooctane sulfonate) are types of chemicals within the PFAS category and have been listed as Persistent Organic Pollutants (POPs), making it illegal (with limited exceptions) to manufacture or use them in the UK and requiring their removal from products and waste streams.
The emerging risks associated with PFAS use are being closely monitored, with the HSE initiating a six-month consultation earlier this year on the use of PFAS in firefighting foam. UK regulation lags behind other countries; for example, the US has already declared PFAS a critical contamination crisis.
Although the UK regulatory framework for PFAS is still in its early stages, the Environmental Agency has begun assessing the risks. It has identified over 10,000 “high risk” sites believed to contain elevated PFAS levels. Some of the highest-risk sites include firefighting foam manufacturing plants, RAF bases, and airports.
Emerging Risks for the Insurance Sector
PFAS present a complex challenge for insurers. They pose potential long-tail liabilities, similar to claims arising from asbestos or environmental pollution, arising from historic use. Moreover, the increased focus of regulators and claimants on PFAS means insurers must navigate a rapidly changing risk that spans numerous lines of insurance – including general liability, product liability, environmental impairment, directors & officers, as well as property and speciality lines.
Insurers' response to this uncertain risk exposure has been to introduce specific exclusions, often based on existing pollution exclusion clauses. For instance, insurers may add a clause excluding any claims “arising out of, resulting from or relating to PFAS of any kind”. Of course, such exclusions will not be relevant to the extent cover attaches to expired policies.
Lloyd’s has also issued standard PFAS exclusion wordings, LMA5595A and LMA5596A[1].
Types of Claims
- Nuisance Claims: arising from contamination of public drinking water and environmental cleanup.
- Personal injury Claims: resulting from exposure to PFAS in everyday products.
- Property Damage/Diminution of Value Claims: caused by PFAS seeping into the ground from industrial manufacturers.
- False Advertising & Product Labelling: Due to products failing to identify the dangers of PFAS.
The New Asbestos?
The insurance market has been questioning whether PFAS will become the “next asbestos”, as both are similar in that they were once widespread, marketed as safe, and only later revealed to be potentially dangerous.
However, a key difference between PFAS and asbestos is that exposure to many different types of PFAS is unavoidable in the modern world, whereas asbestos exposure can usually be traced back to a specific place and time to establish a cause. This causal link is likely to be far more difficult to establish in the context of PFAS exposure.
Currently, unlike in asbestos claims, no disease has been solely linked to PFAS exposure. This complicates the process of directly attributing the development of diseases such as cancer to PFAS, requiring substantial expert evidence to support the claim that the claimant would not have developed the disease without specific PFAS exposure.
UK PFAS Litigation
Although PFAS litigation is advancing through US courts with multimillion-dollar settlements already reached, UK litigation remains in the early stages. So far, there have been no PFAS cases litigated in UK courts, but two British law firms have announced investigations into PFAS contamination cases. While formal proceedings may take time, we might soon see the first UK group action application for PFAS.
Similarly, to date, there have been no regulatory actions; however, the UK Environment Agency or local authorities could designate contaminated sites for remediation in the future. Companies might then face clean-up costs and seek insurance coverage for those expenses.
Furthermore, the lack of UK personal injury claims may stem from the difficulty in proving a causal link between exposure and injury. While legal systems in countries like the US are more claimant-friendly in this regard, the UK requires evidence that a defendant’s actions caused the harm. The widespread presence of PFAS compounds further complicates this issue. There is no precedent in the UK for relaxing causation standards for PFAS, unlike asbestos, where English law permits more lenient rules for mesothelioma causation.
If and when PFAS claims arise, several key coverage questions will need to be answered, including whether PFAS claims constitute “pollution” and whether the contamination was sudden or gradual. When did an “occurrence” of contamination or injury happen (continuous trigger or not)? Can a claimant’s blood PFAS levels amount to an “injury” within the policy period?
Conclusion
PFAS present an increasing challenge across various sectors due to their persistence, health hazards, and complex liability concerns. Their extensive use, environmental durability, and potential health effects have led to heightened scrutiny and regulatory measures. However, the UK’s response via regulators and the Courts is still in its early phases compared to other jurisdictions.
As UK regulation and litigation evolve, proactive risk management and continuous vigilance will be essential to navigate the uncertainties associated with these “forever chemicals.”
[1] https://lmalloyds.imiscloud.com/LMA_Bulletins/LMA23-035-TC.aspx
Chloe Franklin is an Assoicate at Fenchurch Law
Affected by the Riots? Insurance and Other Remedies
Insurance
If your property has been damaged due to the recent nationwide spate of riots, your first port of call for remedy should be your insurers.
Affected individuals should notify their insurers of any damage as a result of the riots, as soon as possible.
Most property policies will include standard cover for physical damage to property. However, some policies may contain an exclusion for losses caused by, or in consequences of riot.
The definition of a riot (unless otherwise defined) in an insurance policy is its technical legal meaning as per The Public Order Act 1986 s.1, which requires a minimum of 12 people for the offence of riot.
The Riot Compensation Act 2016
In the event that a claim is declined, for example, due to a riot exclusion or a vehicle only being insured for third-party losses, the Riot Compensation Act 2016 (“RCA”) may provide an alternative route for compensation.
The RCA was introduced to help communities recover more quickly from the impact of rioting where the affected individuals are either inadequately insured or have had their claim declined by their insurer.
If your property is insured, the RCA requires an affected person first to claim via their insurers. However, If the claim is declined in full or part, the affected person can seek further remedy under the RCA.
What the RCA will cover:
- Owners of a building may claim for damage to the buildings structure;
- Tenants/Occupiers may claim for damaged/stolen contents;
- Damaged or stolen business items stored in a vehicle;
- Damaged or stolen stock-in-trade vehicles; and
- Damaged or stolen underinsured vehicles.
What the RCA will not cover:
- personal items held outside of a building;
- consequential loss e.g. loss of trade or rent; and
- personal injury - this is dealt with by the Criminal Injuries Compensation Authority (CICA).
Deadlines:
- An affected individual will have 42 days from the date of the riot ending to claim under the RCA, unless;
- The affected individual has first made their claim under their insurance, in which case they will have 42 days from the date the insurer declines/partially declines the claim.
How to claim via the RCA:
- Claimants should complete and send the GOV.UK dedicated claim form via post or email to the claims authority for the police force in the area where the riot took place.
- The details of where to send the claim form will be found on the police force’s website.
Helpful Links:
Chloe Franklin is an Associate at Fenchurch Law
The Good, the Bad & the Ugly: #23 (the Good): Scotbeef Limited v D&S Storage Limited (In Liquidation) Lonham Group Limited [2024]
Welcome to the latest in the series of blogs from Fenchurch Law: 100 cases every policyholder needs to know. An opinionated and practical guide to the most important insurance decisions relating to the London / English insurance markets, all looked at from a pro-policyholder perspective.
Some cases are correctly decided and positive for policyholders. We celebrate those cases as The Good.
In our view, some cases are bad for policyholders, wrongly decided and in need of being overturned. We highlight those decisions as The Bad.
Other cases are bad for policyholders but seem (even to our policyholder-tinted eyes) to be correctly decided. Those cases can trip up even the most honest policyholder with the most genuine claim. We put the hazard lights on those cases as The Ugly.
#23 (the Good): Scotbeef Limited v D&S Storage Limited (In Liquidation) Lonham Group Limited [2024]
The Technology and Construction Court (“the TCC”) has recently provided welcome guidance on the interpretation of the Insurance Act 2015 (“the IA 2015”), when considering preliminary issues in Scotbeef Limited v D&S Storage Limited (In Liquidation) Lonham Group Limited.
The Liability Dispute
Scotbeef Limited (“Scotbeef”) issued a claim against D&S Storage Limited (“D&S”) in July 2020 in relation to the supply of defective meat. D&S stated that, applying the terms of the Food Storage & Distribution Federation (“the FSDF”), of which they were a member, their liability for the defective meat was limited to £250 per tonne.
The TCC found that the FSDF terms had not been incorporated into the commercial contract between D&S and Scotbeef, and as such were unenforceable.
The Coverage Dispute
After D&S became insolvent, Scotbeef added its liability insurer, Lonham Group (“Lonham””) as a Second Defendant to the proceedings under the Third Parties (Rights against Insurers) Act 2010.
D&S’ insurance policy with Lonham included a “Duty of Assured Clause” which stated:
“It is a condition precedent to the liability of Underwriters hereunder:-
(i) that the Assured makes a full declaration of all current trading conditions at inception of the policy period;
(ii) that during the currency of this policy the Assured continuously trades under the conditions declared and approved by Underwriters in writing;
(iii) that the Assured shall take all reasonable and practicable steps to ensure that their trading conditions are incorporated in all contracts entered into by the Assured. Reasonable steps are considered by Underwriters to be the following…”
…
If a claim arises in respect of a contract into which the Assured have failed to incorporate the above mentioned conditions the Assured's right to be indemnified under this policy in respect of
such a claim shall not be prejudiced providing that the Assured has taken all reasonable and practicable steps to incorporate the above conditions into contracts;
Following the decision in the underlying proceedings, Lonham advised Scotbeef that D&S had breached the Duty of Assured Clause (“the DOA Clause”), which was a condition precedent to liability (“CP”), because D&S had not incorporated the FSDF terms and conditions into the commercial contract. As such, Lonham argued that the Policy would not respond.
Scotbeef disagreed with Lonham’s interpretation of the Policy, and the Parties sought a decision on the meaning and effect of the DOA clause in a preliminary issues hearing.
The TCC considered the following two key issues:
- Whether the construction of a CP effects its enforceability; and
- When terms which depart from the IA 2015 are enforceable.
The TCC found in Scotbeef’s favour on the following basis:
Issue 1
- The labelling of a CP as such, is not always indicative of it being so, the true effect will be established by the construction of the whole clause.
- Despite the fact the DOA clause was labelled a CP, the clause contained a write back for instances where the policyholder takes all reasonable precautions.
- Further, the consequences of a breach of the CP were found later in the Policy, which made the write back and consequence for breach clauses difficult to reconcile. Therefore the ambiguity of the drafting made the CP unenforceable.
Issue 2
- Section 9 of the IA 2015 prevents insurers from including terms which convert the insured’s pre-contractual representations into warranties in which would effectively permit an insurer to avoid a policy as of right. Section 11 of IA 2015 prevents insurers from avoiding claims in circumstances where the breach was irrelevant to the loss. Therefore, subclauses (i) – (iii) must be read together as to do otherwise would be a clear contradiction to section 9 & 11 of the IA 2015.
- Although sections 16 and 17 of IA 2015 permit some contracting out of the Act, subject to the insurer ensuring the policyholder is aware of the terms, there was no evidence that insurers took any steps to highlight the onerous terms to policyholder and therefore they could not be enforced.
This case provides a new and helpful decision for Policyholders on the interpretation of the IA 2015.
The key takeaways:
- Irrespective of whether a CP is explicitly named as such, the construction of the whole clause will determine whether it is a true CP in practice.
- A true CP should spell out the consequence of a breach and where the consequences are contradictory to the drafting of the clause as a whole, the CP may not be valid.
- Where an Insurer seeks to include terms which depart from the IA 2015 and/or include disadvantageous terms on the Policyholder, the Insurer must take steps to bring the clause to the attention of the policyholder as failing to do so makes them unenforceable.
Chloe Franklin is an Associate Solicitor at Fenchurch Law
The Good, the Bad & the Ugly: #22 (The Ugly) MacPhail v Allianz Insurance plc [2023] EWHC 1035 (Ch)
Welcome to the latest in the series of blogs from Fenchurch Law: 100 cases every policyholder needs to know. An opinionated and practical guide to the most important insurance decisions relating to the London / English insurance markets, all looked at from a pro-policyholder perspective.
Some cases are correctly decided and positive for policyholders. We celebrate those cases as The Good.
Some cases are, in our view, bad for policyholders, wrongly decided, and in need of being overturned. We highlight those decisions as The Bad.
Other cases are bad for policyholders but seem (even to our policyholder-tinted eyes) to be correctly decided. Those cases can trip up even the most honest policyholder with the most genuine claim. We put the hazard lights on those cases as The Ugly.
#22 (The Ugly): MacPhail v Allianz Insurance plc [2023] EWHC 1035 (Ch).
In dismissing an appeal made by a property owner seeking an indemnity for a trespass claim made by his neighbour, the Chancery Division of the High Court has provided guidance on the test for what constitutes an “accident” in the context of a public liability policy, and when actions will cross the line into recklessness.
Background
A development company, Henderson Court Limited (“HCL”), of which MacPhail was a director, undertook the development of a three-house terrace on Henderson Road in London, the development included MacPhails’ own property, number 30. Upon completion of the development, their neighbour at number 28 alleged that McPhail’s basement encroached on their land as it had been extended beyond the boundary line and therefore amounted to trespass.
MacPhail settled the claim with his neighbour and proceeded to pursue a claim against Allianz, with whom HCL held public liability insurance that included an ‘indemnity to principal’ clause allowing for recovery by the third party that had suffered the damage.
The court found Allianz was not responsible for indemnifying MacPhail’s loss because, although MacPhail had a legal liability to his neighbours, the trespass was not “accidental” as required by the terms of the policy. This was because one of the other directors of HCL, Mr Harris, who was in charge of the works had acted recklessly in permitting the basement to be extended to the flank wall of number 28.
MacPhail appealed the decision stating that the Judge had erroneously applied the law in relation to the applicable test for “accidental” and “recklessness”.
The Decision
On appeal, the court upheld the first instance decision.
Firstly, the court agreed with the application of the test for “accidental” at first instance. As set out in Colinvaux’s Law of Insurance and agreed between the parties, this is as follows:
“It is settled law that an accident, for the purposes of an insurance policy, is from the assured's point of view an act, intentional or otherwise, which has unintended consequences. However, if the consequences were intended by the assured, or if the consequences while unintended were inevitable so that the assured can be regarded as having acted with reckless disregard for them, then it is clear from the authorities that there is no accident and the assured is precluded from recovery by the terms of the policy itself as well as on the grounds of public policy. The principle is that, by embarking upon a course of conduct that is obviously hazardous the assured intends to run the risk involved…"
The judge, HHJ Parfitt, had found that the construction of the basement in number 30 to the flank wall of number 28 was intentional and the act of trespass could not have been accidental as there was a willingness to take the risk that it was.
A criticism of the use of the phrase “willingly taking the risk” over the more usual, but archaic, phrase “courting the risk” was rejected, and was not found to lower the test or alter the threshold. The appeal judge, Smith J commented as follows:
“It seems to me that the Judge's formulation is actually quite a good one, provided one does not lose sight of the fact that it is the borderline between reckless and non-reckless conduct that one is focussing on. That borderline really concerns a person's "appetite for risk" (if I can introduce my own attempt at re-phrasing), with intentional conduct unequivocally on the non-accidental side of the line, and a state of mind consciously and reasonably not even anticipating the risk on the accidental side of the line.”
Secondly, Smith J considered whether Harris had acted recklessly in failing to consider where the true boundary line would be. MacPhail argued that there couldn’t possibly be a finding of recklessness when Harris didn’t know where the boundary line was. However, Smith J stated that in the test for recklessness, it is not a question of belief or understanding alone, but one of the quality of that belief or understanding. The court found that whilst Harris may have believed that the boundary line coincided with the flank wall of number 28, that he must have known that it was at least arguable that it didn’t, and therefore he acted recklessly.
Comment
The judgment in this case provides a useful reminder of the legal tests to be applied when considering where the boundary lies between reckless and accidental acts in the context of public liability policies.
Here, a decision was made to extend the basement either knowing it would be a trespass or willingly taking the risk that it would be. That was sufficient to cross the line and make the conduct not accidental. By contrast, conduct on the accidental side of the line would involve a state of mind where the risk was, consciously and reasonably, not even anticipated.
While the decision is undoubtedly correct, and in line with existing law, it is nevertheless a timely reminder for policyholders that their subjective belief as to a state of affairs, in and of itself, is insufficient to make an unintended outcome accidental in circumstances where, by embarking on a course of conduct that is obviously hazardous, they are willingly taking a risk such that the unintended consequences that follow will be deemed to have been inevitable.
Chloe Franklin is a Trainee Solicitor at Fenchurch Law