MARKETING MATERIAL
Managing Lithium-ion Battery Fire Risk
Guidance to help reduce fire risks from lithium-ion battery use, storage and charging.
Lithium-ion battery fires are an increasing risk for property owners and occupiers, driven by the growing use of electric vehicles, battery- powered equipment and energy storage systems. Robust controls are essential for safe storage, charging and handling.
In this article, Arran Singh, Head of Risk Engineering at AIG UK, explains how risk engineering assessments can help organisations identify and mitigate these evolving risks.
Where are lithium-ion battery fire risks most commonly emerging?
- Electric vehicle battery risks can arise from manufacturing defects, physical damage, electrical faults, overcharging and exposure to extreme temperatures.
- Warehouses store lithium-ion batteries in many forms, including finished products, spares, damaged returns, electric material-handling equipment and batteries awaiting shipment or disposal. The growing use of lithium-ion-powered equipment, such as forklifts, is reshaping warehouse operations while introducing additional fire risks.
- Data centres increasingly rely on lithium-ion batteries in uninterruptible power supply (UPS) systems. Hyperscale facilities can deploy large numbers of lithium-ion UPS modules across data halls, electrical rooms and utility areas.
- Manufacturing facilities may contain lithium-ion batteries in products, battery packs, robotic systems, tools, mobile equipment and plant energy-storage systems.
- At recycling facilities, batteries may arrive damaged, partially charged with unknown residual energy, mixed with other waste, poorly identified by chemistry or condition, or in forms that conceal damaged cells or packs. Mechanical processing further increases fire risk.
The Scale of the Risk
Lithium-ion batteries now power millions of devices in homes and businesses. Their sheer prevalence, combined with inconsistent regulation and limited public awareness of fire risk, is contributing to a sharp rise in incidents. UK fire brigade data shows 432 e-bike fires and 147 e-scooter fires linked to lithium-ion batteries in 2025, up 38% and 20% year-on-year, respectively. Prevention is the priority, and AIG’s risk engineering teams can help clients put the right safeguards in place.
Why is a risk engineering assessment so important?
Risk engineering assessments provide practical insights that help underwriters make informed decisions about insurance capacity and pricing. They also help brokers and clients identify key risks and develop tailored mitigation strategies.
What does a typical risk engineering site assessment for lithium-ion batteries involve?
Assessments take a holistic view of a site's construction, occupancy, protection features and exposures, including natural catastrophe risks. At a manufacturing site, this may include reviewing process lines and flow diagrams; at a shopping centre, it may focus on fire protection such as sprinkler coverage. Construction reviews consider location, layout, separation and segregation between manufacturing, battery ageing and warehouse storage.
What can businesses do to reduce lithium-ion battery fire risk in properties?
From a risk engineering perspective, recommendations may include:
- Early warning: Installing smoke, gas and off-gas detection systems to identify adverse conditions early. These systems can detect electrolyte vapours or other warning signs before thermal runaway, enabling rapid action such as isolating or removing affected batteries, stopping charging and activating ventilation.
- Fire protection: Once thermal runaway starts in a battery cell, it is difficult to stop. Fire protection should therefore include access to water-based cooling systems and sufficient rack storage separation to help limit fire spread and propagation.
- Proper facility layout: Strict physical segregation between battery manufacturing, charging, ageing, testing, and storage areas is vital to prevent cascading thermal runaway risk.