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Lithium-ion Batteries – Managing the Risk





Rechargeable lithium-ion batteries are now a part of everyday life, in everything from laptops, mobile phones, tablets, and smartwatches to e-scooters and electric cars. This Christmas it’s unlikely you’ll be stealing the batteries from the TV remote, you’ll be looking for a spare USB charger!

Lithium-ion batteries are becoming more popular as the world becomes ever-more technologically advanced and manufacturers focus on sustainability, with the global lithium-ion battery market valued at $46.2 billion in 2022 and expected to grow to $189.4 billion over the next decade.

It’s true that lithium-ion batteries bring numerous benefits, but they also come with risks – and it’s vital that wholesalers and retailers who store and sell products containing these batteries are aware of them.

Insurer NIG have shared the following information, so you’re aware of the risk.

Fire and explosion risk

During normal use, lithium-ion batteries are perfectly safe. However, if they are damaged, a chemical reaction inside the battery can cause the computer chip used to control the charge level to short circuit. This causes the battery to overheat very quickly and can lead to fire. Overcharging, or using the batteries in the wrong piece of equipment, can also cause short-circuiting. Lithium-ion batteries are particularly dangerous as they release a toxic flammable vapour which fuels the fire further and makes it difficult to control. Even if a fire appears to have been extinguished, it could reignite hours or even days later.

In commercial environments, such as warehouses, or waste recycling centres, the sheer volume of lithium-ion batteries near one another means any fires could easily get out of control.

Liability risk

Businesses selling products using lithium-ion batteries could find themselves at risk of product liability claims if products are found to be defective and cause any harm to consumers.

There are also liability risks for businesses transporting batteries or products containing them. Ultimately, it’s the sender’s responsibility to ensure they are packed correctly, labelled appropriately, and transported via the correct means.

How to manage risk around lithium-ion batteries

There are currently no specific UK guidelines for fire protection of lithium-ion battery storage, however, the Fire Protection Association (FPA) suggests the following:

  • Limit storage area to no greater than 20m2
  • Limit storage height to 1.8m
  • Separate multiple storage areas by aisles a minimum of 3m wide

There are also other measures you can take to help reduce risk, including:

  • Following all manufacturer instructions for usage correctly
  • Never exposing batteries to high temperatures or leaving them in direct sunlight
  • Always use a reputable named brand of charger, designed specifically for the battery you have
  • Looking out for any signs of physical damage
  • Educating your teams around the potential risks and ensuring there is a clear plan if a fire does break out
  • Considering how to safely dispose of batteries, for example away from other waste forms and in a lidded metal container

It’s also essential that any businesses dealing with lithium-ion batteries have a fire risk assessment that covers handling, storage, use, and charging.

If you are storing or selling products containing lithium-ion batteries and need advice or wish to discuss any potential implications for your insurance, just get in touch with your usual Wilsons contact or email [email protected]