The lady says no – and she’s not for turning…

Imagine how Amanda Blanc, appointed Aviva’s Chief Executive in July this year, would feel if she woke up to find that her insurer had refused to insure her home, and that it was now effectively uninsurable. In truth, she wouldn’t give a damn because, according to Aviva’s website:

• “Amanda will receive a basic annual salary of £1,000,000. She will be eligible to participate in Aviva’s annual bonus scheme for 2020 and her maximum bonus opportunity will be 200% of salary”.

Aviva itself isn’t short of a few pounds. Last year’s profits were £3.2 billion, it manages fund totalling over £346 billion and has just agreed to sell a majority stake in its Singapore arm for £1.6 billion.

Now imagine the shock to every resident of the Grand as Aviva have refused to renew cover from October 1st. With only two weeks to make alternative arrangements, the near certainty is that this iconic building will be uninsured, and quite possibly, uninsurable.

How has this come about, and who is responsible?

Two events coincided:

• The first was a scheduled routine inspection of the building by a risk consultant from Aviva, Shirley Albury, in August.

• The second was the discovery of a long-withheld engineer’s report that Michael Stainer, the former director of the company that currently owns the Grand, had sat on since July 2013.

Needless to say, this report was immediately made available to Shirley Albury, as is obligatory under the Insurance Act 2015. There is an absolute obligation to disclose any information that an insurer might want to take into consideration when assessing risk. We can say with certainty this never happened in 2013, and as the report was not made known to the managers who took over responsibility after June 2014, Aviva remained in ignorance of this additional and significant risk.

The very thorough survey also revealed serious failures on the part of Hallam Estates, as freeholder, in regard to fire prevention work first required under an enforcement notice dating back to 2018. There is a list of serious concerns which would alarm residents and visitors to the Palm Court or Keppels, some of which you can see via this link.

• Damaged lighting to kitchen extract hood and grease build up

• Use of extension leads in kitchen and basement to power lighting/appliances

• PAT appears overdue – this refers to the testing of electrical appliances

• Damaged equipment in congested laundry

• Fire Risk Assessments completed 2018 overdue for review

• Maintenance room in poor order with excessive rubbish, poor housekeeping, unguarded drill, makeshift lighting, flammables stored on open shelving and some evidence of the completion of hot work

• Occasional use of portable electric heaters

• Fire action notices not in place

• Fire load – high (furnishings/some flammable maintenance products stored on open racking in basement)

• There are significant compartmentation issues noted in the basement areas which are likely to allow fire spread from the basement to the ground floor.

The finger must be pointed at Michael Stainer. There is no doubt he, and he alone, is in charge.

There have been rumours of serious structural issues at the Grand ever since the Tribunal visited the building in January 2018 when reference was made to the condition of the upper level of the south elevation. No reference was made to an engineer’s report. Again, in the hearing on June 30th-July 1st, Mr Stainer was vociferous on the subject of the southern elevation, but again no reference was made to an engineer’s report being in his possession. It was only after the case was heard that the report’s existence came to light via another firm of agents and was made available, and then, only after numerous residents wrote to Mr Stainer, demanding to see a copy. Prior to that he had refused to hand it over to the Tribunal-appointed Manager, Alison Mooney.

But let’s put Michael Stainer on one side. His history of unpaid debts, historic neglect of the building, compulsive litigation is well known to courts across the land. In the last two weeks, the High Court threw out his attempt to prevent the forced sale of two of his wife’s flats and granted the Alison Mooney as Manager, a charging order over part of the freehold.

No, we’ll ignore Michael Stainer, so let’s talk about Aviva and their social and ethical obligations. On their website they state:

• “Our aim is to give you the confidence and control to be ready for whatever life has to throw at you”.

Quite how this reconciles with giving the Grand two weeks to find alternative cover, and then, grudgingly, after an intervention via their press office, a further two weeks, at a cost of over £2,200, is impossible to say. This withdrawal of cover puts the residents in an impossible situation. The first question on any proposal form goes something like this:

Have you, your Directors, Partners or family members involved with the business or any other business ever:

• Had a proposal or insurance declined, cancelled or refused?

• Had any renewal refused

The answer to this will make any other insurer run a mile.

A moral and ethical insurer, such as Aviva claims to be, would be quite within its rights to do the following:

• Alert the insured as to their concerns

• Require remedial action

• Set a robust timeline for compliance

• Increase premiums, exclude certain risks or impose an excess

But no moral and ethical insurer would pull the plug and skulk away, and then by way of a sop, offer a two-week extension. No moral and ethical insurer would deny an insured party the opportunity to put remedial measures in place. Aviva have done both.

So we put this question to Aviva – come clean, is there something you are not prepared to say about the Grand that terrifies you so much, you’ll abandon your responsibilities to some very elderly and vulnerable people, some of who have mortgages with you?

An accidental by-product of all this is that the commercial areas, and the holiday flats, will be forced to close. Since they never contribute to the £50,000 annual insurance premium, there might be some poetic justice in this. That is no comfort to the staff, betrayed yet again by the man who has milked the Grand rotten for decades.

The Shepway Vox Team

Not owned by Hedgefunds or Barons