Lithium-ion batteries are indispensable. They power tools on job sites, home electronics, and essential equipment. However, when mishandled, these batteries pose serious fire risks — potentially catching fire and causing costly property damage, business interruptions, or worse.
With the growing reliance on lithium-ion batteries, adequately structured business insurance and personal insurance offer protection from lithium-ion battery fires, with key exclusions. This article explores the risks of these batteries, practical fire-prevention steps, and how Selective Insurance Company’s free Rechargeable Lithium-Ion Battery Assessment can help businesses avoid hazards.
Understanding the Risks of Lithium-Ion Batteries
Lithium-ion batteries can be dangerous because they contain flammable materials. Their cells are packed tightly together, and if one cell gets damaged or overheats, it can cause a chain reaction. Known as thermal runaway, this chain reaction — where heat spreads from one cell to the next — can lead to the entire battery catching fire.
Common Causes of Lithium-Ion Battery Fires
- Overheating: Charging or storing batteries in hot environments increases failure rates.
- Physical damage: Dropping, crushing, or puncturing a battery can breach the internal separator.
- Incorrect charging: Using non-approved or counterfeit chargers risks overcharging and heat buildup.
- Improper Storage: Batteries left near combustible materials or moisture can ignite unexpectedly.
Preventive Safety Measures
With lithium-ion batteries in everyday use across homes and businesses, preventive safety measures are critical to reducing fire risk.
Storage Best Practices
Batteries should always be kept in a cool, dry place, away from direct sunlight and flammable materials. For those storing multiple batteries, fire-resistant containers offer added protection.
Charging Safely
Always use chargers that the device manufacturer approves. Avoid charging batteries overnight or leaving them unattended. Charging stations should never be placed near heat sources or combustible surfaces.
Handling and Maintenance
Inspect each battery regularly for signs of damage, such as swelling or leakage. Replace any compromised unit, and never carry loose batteries in a pocket or bag where they might come into contact with metal objects.
Proper Disposal and Recycling
Proper disposal requires your commitment. You and your employees should never throw lithium-ion batteries in the trash — they can ignite in landfills or garbage trucks. Instead, take them to designated recycling or hazardous waste centers and follow local regulations for safe disposal. For additional best practices, see the NFPA’s Lithium-Ion Battery Safety Tips and OSHA’s Battery Safety Guide.
The Role of Business and Personal Insurance in Fire Protection
Fire insurance policies may cover fires caused by lithium-ion batteries if the incident is accidental, such as a battery overheating during regular use. However, carriers may deny coverage if negligence involves unsafely using counterfeit chargers or improperly storing batteries. Policy details vary, so reviewing your current coverage is necessary to avoid surprises after a loss.
Business Insurance and Battery-Related Fire Risks
- Commercial property insurance: This insurance can cover fire damage only if the cause and circumstances fall under your policy.
- General liability: This policy may respond to battery-related incidents, but exclusions for misuse or negligence are standard.
Personal Insurance Considerations
Fires caused by mishandled batteries at home may not be covered by standard homeowners or renters insurance policies.
- Homeowners/Renters insurance: Check policy language regarding fire coverage and exclusions.
- Umbrella policies: These can provide additional protection, especially in cases of personal liability from battery-related fires.
Why Proactive Measures Affect Coverage
Insurers favor policyholders who reduce risk. Businesses that follow battery safety best practices may qualify for lower premiums and broader protection. For homeowners, proactive fire prevention may support smoother claims processes and reduce the likelihood of coverage being denied due to negligence.
How Businesses Can Assess Their Risk with Selective’s Safety Assessment
Understanding how your team uses and stores lithium-ion batteries is essential. We work closely with Selective Insurance, a trusted provider of commercial coverage, which offers a Rechargeable Lithium-Ion Battery Assessment to help businesses identify weak points and improve safety protocols.
What the Assessment Reviews
- Battery storage protocols
- Charging procedures and equipment used
- Employee training and safety habits
- Frequency and quality of battery inspections
This assessment does not affect your premiums and offers actionable insights to help you prevent fires.
Post-Assessment: Implementing Best Practices
After completing the assessment, Selective provides the Best Practices Guide that businesses can use to improve safety measures. To stay ahead of potential risks, encourage regular employee training and integrate safety checks into daily routines.
Taking Action To Prevent Battery Fires
Lithium-ion batteries will continue to be integral to our lives and businesses. But their fire risks are real and often preventable. We recommend that businesses take advantage of Selective’s Lithium-Ion Battery Assessment and that homeowners check whether battery-related fires are included in their coverage.
Don’t wait until an accident forces you to act. Contact Brooks, Todd & McNeil today to proactively protect your property, business, and family.
About Brooks, Todd & McNeil
Since 1839, the independent agents at Brooks, Todd & McNeil have proudly served our community by offering reliable and affordable insurance solutions from trusted providers. To learn more about our products and services, contact us today at (800) 448-4567.