We wrote in September last year about what businesses need to address with usage and storage of lithium-ion batteries and Health and Safety at Work. This is important to businesses across all sectors but specifically we wrote this for our motor trade clients. Here there are clear and obvious issues arising out fires on premises and insurance consequences of not understanding often strict policy conditions from insurers.
What is The Issue?
Lithium-ion batteries used in electric vehicles (EV’S) have been identified as a potential risk due to their thermal instability. When damaged, mishandled, stored or transported incorrectly, these batteries can experience ‘thermal runaway’, a rapid self-heating fire that can lead to explosions which can happen days or even weeks later.
Thatcham Research
Research that EVs are generally less likely to catch fire compared to traditional combustion engines, the intensity and severity of these fires can be significantly greater. In simple terms there is a low frequency of fires but when they do happen the severity is high.
Insurers – Aviva and Allianz
Allianz UK has specifically warned motor traders to be aware of the risks associated with electric vehicle battery fires. Two recent motor trade premise fires resulted in over £5m and £1.5m worth of claims. Both were the result of a faulty EV battery that had been removed and was stored at the garage awaiting collection from the manufacturer for investigation.
Rather obviously, we agree with Allianz around the need for motor traders to ensure proper storage and charging practices and collaborating with insurers and brokers to prevent incidents.
Aviva have also published survey results of 501 UK businesses around lithium-ion batteries which makes uncomfortable reading:
- 54% of respondents had experienced an incident involving one – of those
- 36% reporting they had experienced a battery overheating.
- 19% of businesses had experienced a device or battery sparking
- 17% had experienced smoking.
- 13% of respondents had experienced fires, with 12% reporting explosions.
According to the London Fire Brigade, there was a fire from a lithium-ion battery purely from e-bikes or e-scooters every two days in 2023 in London. The government also recommends to the motor trade sector that electric vehicles awaiting repair be stored in an outside quarantine area, at a distance of at least 15 metres from any other objects.
Legislation
Last year’s King’s Speech included a commitment to introduce the Product Safety and Metrology Bill. The new legislation aims to enforce a more robust standard of safety checks with substandard lithium-ion batteries. Manufacturers will no longer be able to self-certify their products. The intention being to improve standards.
