How to reduce the risk of lithium-ion battery fires
If you’re reading this on your phone or laptop, you’re holding one of the world’s most widely used battery technologies – lithium-ion.
Lithium-ion batteries power everything from mobile phones, tablets and laptops to power tools, e-bikes, e-scooters and electric vehicles.
And while there are many benefits to lithium-ion battery technology – greater energy storage, recharging capacity and scalable size – they present a significant fire hazard if not managed properly.
Increasing fire risk
Research by insurer IAG predicts the average household will contain around 33 lithium-ion powered devices in 2026, significantly increasing the potential for battery-related fires.
When used correctly, lithium-ion batteries are generally safe and reliable, and fires or explosions remain relatively uncommon. However, incidents are increasing across Australia as the number of battery-powered devices continues to rise.
Many of these fires are linked to damaged, faulty or poor-quality batteries commonly found in e-bikes, vapes and smaller electronic devices – and the consequences can be devastating.
Unlike traditional batteries, lithium-ion batteries contain a flammable electrolyte. If the battery overheats or becomes damaged, the electrolyte can ignite, causing intense fires or explosions that are extremely difficult to extinguish. In many cases, the battery continues releasing flammable gases, effectively fuelling the fire even further.
Impact on insurers
JMD Ross Director John Davaine said insurers are already factoring the presence of lithium-ion batteries and charging stations into their underwriting assessments.
“We anticipate this will continue to evolve and it’s quite likely that properties where lithium batteries are located will attract higher premiums, increased deductibles or even specific exclusions,” he said.
“It is important that the presence of lithium batteries is declared to insurers and we would recommend speaking with your broker before introducing these batteries to your property so any insurance implications are fully understood.”
How to reduce the risk
There are several practical steps you can take to minimise the risk of lithium-ion battery failure and fire:
- Only purchase batteries and charging equipment from reputable manufacturers, and ensure chargers are certified and designed specifically for the device being charged.
- Store, charge and use batteries within a safe temperature range – ideally between 0°C and 40°C. Avoid exposing devices to direct sunlight, hot surfaces or parked vehicles on warm days.
- If charging multiple devices regularly, consider using a dedicated charging cabinet designed to contain and prevent the spread of battery fires.
- Avoid leaving batteries connected to chargers long after charging has finished.
- Regularly inspect batteries, charging cables and devices for signs of damage, swelling or overheating. Damaged batteries or equipment should be removed from use and disposed of immediately.
When disposing of lithium-ion batteries, cover the terminals with insulating tape to prevent accidental short circuits and place them in a metal container with a fitted lid. Used batteries should be removed from the property promptly and disposed of through an approved battery recycling provider.
How we can help
As lithium-ion batteries become an increasingly common part of everyday life, understanding the risks and implementing the right safety measures has never been more important. A proactive approach to battery storage, charging and disposal can significantly reduce the likelihood of fire and help protect your people, property and business operations.
If your business stores, charges or relies on lithium-ion batteries, now is the time to review your risk management and insurance arrangements. Speak with the team at JMD Ross to better understand your exposure and ensure your cover remains fit for purpose in an evolving risk landscape.
- John Duncan 0418 976 772 jgduncan@jmdross.com.au
- John Davaine 0413 610 523 jdavaine@jmdross.com.au
- Bhavesh Radiya 0414 247 055 bradiya@jmdross.com.au