Over the last decade, the lithium-ion battery market has grown massively – and it continues to expand, with a projected increase of 19% from 2023 to 2030.1
A lithium-ion battery uses the reversible reduction of lithium ions to store energy.2 These devices collect energy while charging, from a grid, power plant or renewable source. Once charged, the electrical energy is stored, and then discharged to meet consumer demand. They are most often used in cell phones, electric vehicles, power tools, household electronic devices, e-bikes and e-scooters. Lithium-ion batteries can also work in tandem with electrical power storage devices, like, battery energy storage systems (BESS). They require less ongoing maintenance, which can lead to cost savings for your business.
Despite national safety standards, poor design and misuse in the transport, storage, use or charging of lithium-ion batteries continues to result in fires. According to the U.S. Consumer Product Safety, lithium-ion batteries have caused 25,000 fires in the last five years.3
“Lithium-ion batteries not only increase the number of fires, but they especially increase the severity of a fire event due to the thermal runaway potential which can occur with these batteries. Thermal runaway is a phenomenon which causes rapid fire intensification due to a flammable electrolyte within the cells, and it can quickly spread to adjoining battery modules and packs,” said Kenneth Travers, property technical manager for the risk engineering team at The Hartford.
Even when handled properly, there is cause for concern because “overexposure to heat or damage can cause the electrolyte to ignite, explode and expose adjoining battery cells within the pack,” said Travers. “This is especially important to be aware of if you are transporting the batteries or installing them in a place that would increase the core temperature.”
Other causes of fire include:
- Mechanical abuse or damage: This can be caused by the battery pack, or package, being dropped in the manufacturing process, during shipment or in handling.
- Manufacturing defect: This can create conditions which may make a particular battery unit prone to short circuit during use.
- Excessive battery overcharging: Lithium-ion batteries are prone to overheating. Leaving a rechargeable battery plugged into its charging unit for an excessive period of time is not advised by manufacturer’s, especially when the charger over-limit protection is not present, which removes power from the system if the voltage rises to unsafe levels during charging.
- Short circuits: A battery may short-circuit for a number of reasons, including poor design, sub-standard manufacturing, product defect and physical damage.
“There are economic and environmental benefits to using renewable energy sources,” said Stacie Prescott, head of energy at The Hartford. “However, you need to ensure you find the best place to store that energy. If you are trying to store electrical power production from something like solar panels, lithium-ion batteries could be a good temporary storage resource, as they can deliver large amounts of energy on demand.”
Ways to Help Reduce Your Risk of Fire Loss
It is essential for businesses to understand the risks associated with the use of lithium-ion batteries to help keep your business protected, including:
Prevention Starts in the Design Phase
When possible, engage supplier and engineers during the design phase. When planning to integrate lithium-ion batteries, ensure they meet or exceed industry consensus standards, such as SAE International (SAE), UL Certification (ULC) and The International Electro-technical Commission (IEC).
Establish Safe Handling Measures
It is important to establish acceptance and handling procedures for when the batteries arrive. Additionally, you should update your emergency response plan to include extinguishing, ventilation or entry procedures.
Education on Warning Systems
Always involve a legal expert on your team as you develop instructions for how to properly use, maintain, store and dispose of rechargeable batteries according to federal and state regulation. It is also important to confirm education materials address information on proper storage, instructions for use, environmental limitations, expected life cycle and preventative maintenance.
Contractual Risk Transfer
A comprehensive contract will typically include several clear technical requirements. These specifications are designed to mitigate the legal risk associated with a faulty product.
“You need to carefully assess the impact of the changes from a safety perspective,” said John Munnings-Tomes, international chief risk engineer at The Hartford. “I’ve seen many companies rush to make noble changes to address environmental concerns without assessing how it would impact the company from a safety perspective.”
1 “Lithium-ion Battery Market Size, Share & Trends Analysis Report By Product (LCO, LFP, NCA, LMO, LTO, NMC), By Application (Automotive, Consumer Electronics), By Region, And Segment Forecasts, 2023 – 2030,” Grand View Research, August 2023
2 “Lithium-ion Batteries,” University of Washington, July 2023
3 “Preventing Fire and/or Explosion From Small and Wearable Lithium Battery Powered Devices,” Occupational Safety and Health Administration, June 2019
La información proporcionada en estos materiales brinda información general y de asesoría. It shall not be considered legal advice. The Hartford does not warrant that the implementation of any view or recommendation contained herein will: (i) result in the elimination of any unsafe conditions at your business locations or with respect to your business operations; or (ii) be an appropriate legal or business practice. The Hartford assumes no responsibility for the control or correction of hazards or legal compliance with respect to your business practices, and the views and recommendations contained herein shall not constitute our undertaking, on your behalf or for the benefit of others, to determine or warrant that your business premises, locations or operations are safe or healthful, or are in compliance with any law, rule or regulation. Readers seeking to resolve specific safety, legal or business issues or concerns related to the information provided in these materials should consult their safety consultant, attorney or business advisors. All information and representations contained herein are as of September 2023.