Because this was your first suggestion Clan, is this a common or at least, known issue?

no not common just a few isolated cases around ,but a worst case suggestion which is what you have to be ready for . .

Just a few is still more than should be expected on such a new car.
I wonder if there's a common link between the affected few like build week for example.

never seen it on the new model range from 2015 xc90 but too few to remember any statistics .

I brought the car to garage. Keeping overnight. The pressure test is a high bar? I asked them to take off the head and they are thinking about that. As a matter of interest there is some type of yellow/brown sealant in the area around the coolant sump. It is like along the metal sheeting seals that make up the car? Any ideas?

The car has been in the garage for the last week and a half. They were carrying out tests. Latest is that the warranty provider will not pay for the investigation of taking off the head gasket but will pay for a replacement head gasket if it is damaged. Any views on this?

Sorry to say you are in trouble. With that attitude the warranty company is looking to wash their hands rather than find a fix. If you pay the labour will they pay for the bits?
Can you hand it back and get a refund? If so that would be my course of action.
If you cannot it's going to be expencive for you, either in funding the investigations and fix or getting rid of it as the word is now out and folk know it's a problem car.

Even as a diy fix the parts are going to mount up and the only way to be sure it's not the part is to use genuine.

Paul.

have you read the small print? surely any warranty covers major engine damage as it is so rare these days ? It is likely you will need a new engine ...

I just spoke to the garage. They have exhausted external pressure check and are going to take off the head. the warranty insurance company said that they will pay for the repairs if there is an engine/head problem but if it turns out not to be then they won't. I will have to go with that. would you need a new engine if it is repairable?

thats fair, no you would not need a new engine if it was repairable .... let them find out whats wrong , is it a volvo garage ? If not then you loose any chance at all of good will payment from Volvo .