A notable new paper from Gallagher Re, entitled Lithium-Ion Battery Fires: A burning issue for urban centers and beyond, provides food for thought, and some statistics, to those interested in the liabilities related to growing dependence on lithium-ion (Li-ion) batteries. 

The paper states that in the United States alone there were over 25,000 fires related to Li-ion batteries between 2017 and 2022. The problem is most pronounced in urban areas, they add, where the use of e-bikes and e-scooters has grown substantially. 

“In 2023 there were 18 fatalities in New York blamed on exploding Li-ion batteries. This pushed the total death toll from fires in the city to over 100 in two decades,” they write.

Thermal runaway situations 

The report discusses “thermal runaway” and notes that the extreme heat generated by electric vehicle (EV) battery fires can reach up to 4,900 degrees Fahrenheit. “Early detection systems are critical in controlling Li-ion battery-related fires, but they’re still in the early stages of development,” they add. “The biggest underwriting concerns are thermal runaway situations that cause fire or explosions.” 

Globally, they add that demand for the batteries is expected to surge seven-fold by 2030, driven in large part by demand for electric vehicles. “Nearly 24 per cent of all EV fires are directly caused by li-ion battery packs," they add. The report also notes that the batteries can also catch fire when exposed to saltwater, a phenomenon observed following Hurricane Ian in Florida and during typhoons in Japan.

Growing marine exposures 

The report also examines fires caused by non-certified batteries, earbuds and vape pens in recycling facilities (the sector’s growing susceptibility to facility fires make it difficult for some companies to access insurance coverage, they note) and growing marine exposures (salt water).

“Incidents of Li-ion battery-related fires are increasing globally, leading to physical damage and personal loss. The resulting claims have insurers reevaluating their liabilities, as businesses and policymakers seek to better understand the risk in incidents and take steps to mitigate the risk,” the reinsurer states.

“Exposures will continue to grow as our reliance on Li-ion batteries increases,” they conclude. “Underwriters are reevaluating how they price and assess the risk, with the potential for stricter wording and exclusions in the future. Taking proactive steps to mitigate exposure to thermal runaway involves investment in safety controls and quality assurance across the value chain, alongside greater education and awareness on how Li-ion battery fires can be prevented.”