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Lithium-ion batteries: Mitigating the risks around their use and storage

By Adrian Simmonds
Interim Practice Leader

As a leading business insurer, we are all too aware of the risks that lithium-ion batteries can pose in commercial and industrial environments.

Rechargeable lithium-ion batteries were first introduced in 1991. Today, they’re everywhere. Think about how many rechargeable devices are in your home and workplace - from the fitness tracker on your wrist, your mobile phone, tablet and laptop to e-scooters and e-bikes.

Now, with the push for greater sustainability influencing many businesses, new applications for lithium-ion batteries are being embraced, such as their use in power tools, forklifts and electric vehicles.

As a way to store energy from the sun, wind and other renewable sources, battery energy storage systems (BESS) can reduce greenhouse gas emissions.  Compared to its competitors, lithium-ion batteries have a high power-to-weight ratio, high energy efficiency, good high-temperature performance, and low self-discharge[i]

Fire risk

In normal use, lithium-ion batteries are stable and work as intended with no problems. However, these batteries are particularly sensitive to high temperatures and are inherently flammable, as well as being sensitive to cold temperatures and over-charging. 

Certain circumstances, such as if the battery has been damaged by dropping or piercing of the device, even heavy jolting, can trigger a fault inside the battery causing it to short circuit. This can cause the battery to severely overheat very quickly and go into ‘thermal runaway’, which can then lead to a fire.

There are several technologies used for lithium-based batteries but the most commonly used is referred to as NMC, as, in addition to lithium, the other main materials are nickel, manganese and cobalt. Compared to other battery technologies, NMC batteries are the ones most often involved in fires in vehicles, phones, laptops, e-scooters etc. as the technology is less stable when damaged and can be more volatile.

Lithium-ion battery fires are very dangerous and can be difficult to deal with because they release a flammable and toxic vapour which helps to fuel the fire. Specially designed lithium battery fire extinguishers known as fire extinguishers are available. These release a water-based solution of a material called vermiculate and seals around the damaged battery to limit further fire spread. However, all employees should be made aware that the vermiculite does not stop the thermal runaway process and corresponding fire and explosion risk; the thermal runaway process will continue under the vermiculate and is waiting to accelerate again.  The benefit of using vermiculate-based Lith-Ex fire extinguishers is that it gives people time to escape whilst giving firefighters time to respond and to move the device to a safer location.

As an alternative to a lithium battery fire extinguisher, a Class B fire extinguisher (powder, foam, CO2) can also be used, although the risk of the fire reigniting is more likely.

In addition to public place, Lithium-ion battery fires are occurring in people’s homes, where Lith-Ex extinguishers are not available.  If a fire starts while using a personal mobility device (such as a e-scooter or e-bike), an electronic device (such as a phone or laptop) or while using an electric/hybrid vehicle, no one should attempt to extinguish the fire unless they’re trained and are using Lith-Ex extinguishers. Those impacted as well as any by-standers should evacuate and stay at least 10 metres (half a tennis court) away from the item on fire.  This is important as the explosive force of a fire and thermal runaway release can throw hot metal and burning chemicals many metres.

Strategies to mitigate the risk

As a leading business insurer, we are all too aware of the risks that lithium-ion batteries can pose in commercial and industrial environments. To migrate this risk, at a minimum, their use and resulting fire risk is something that should be addressed as part of a business’ fire protection and emergency response arrangements.

Whilst we can’t cover every aspect of risk management in this article, we would suggest that raising awareness of lithium-ion battery risks should include:

  • A pre-defined Emergency Response Plan to tackle damaged or overheating lithium-ion batteries. Key employees should be trained BEFORE lithium-ion batteries are permitted on site.
  • As part of their use, those using lithium-ion battery powered equipment should avoid extreme heat and freezing temperatures. Employees should be advised to never stack heavy objects on top of batteries or devices containing batteries[ii].
  • Where lithium-ion personal mobility devices or mobile plant, such as forklift trucks (FLTs) and powered pallet trucks (PPTs), are in use, the battery charging should be done in a fire-rated non-combustible structure/room located outside the main building or attached to the external wall. Charging inside the main building requires a minimum four metres clearance from all combustibles and for the charging zone to be monitored by ‘hot-spot’ thermal fire detectors to trigger power isolation on the chargers. Make sure all charging is done during working hours, though. If battery charging is done out-of-hours, additional expensive control measures are recommended such as early alert off-gas detection and localized automatic fire suppression such as water mist protection to contain fire spread.
  • Where the battery is designed to be detachable, remove the battery from the equipment when it’s not in use. Lithium-ion must be stored in a charged state, ideally at 40% and between 30% and 50%[iii].  Once removed, lithium-ion batteries should be stored in a cool and dry location, avoiding direct sunlight as well as heat sources.  It is also important to not expose the battery to condensation, excessive humidity, or water.
  • Where lithium-ion batteries are being bulk-stored in a warehouse, they should be segregated from other materials and stored in a non-combustible, well-ventilated structure/room with sufficient clearance between the walls and the battery stacks. There should also be clearance between the batteries to allow air to circulate. Floor stacking of lithium-ion batteries should be strictly controlled in designated areas with limited stack heights, footprints and separation distances.  Rack storage of lithium-ion batteries should not be permitted unless the building and the racks are fully sprinklered with solid metal horizontal and vertical barriers between each storage bay.
  • If the battery has or may have sustained damage, use a hand-held IR gun to perform thermography inspection. ANY deviation from the normally expected general temperature by 3°C or more on any individual lithium-ion battery package should be reported to management immediately so the pre-defined emergency response action plan can be initiated.
  • As a precautionary measure, a steel bin partially filled with water should be kept outdoors at least three metres clear of the building, ready for any lithium-ion batteries with elevated temperatures to be placed into by a forklift truck. Other fire containment materials such as vermiculite or sand can be used to smother the affected battery. These measures might not stop the chemical fire from continuing but they will assist with fire containment.
  • At no point should a lithium-ion battery be opened, destroyed or incinerated since they may leak or rupture and release the ingredients they contain into the environment [iv].  Any swollen, dented or otherwise damaged batteries should be recycled or disposed of by a company qualified to do so.



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Lisa Wolfe

Lisa Wolfe

Portfolio Manager - Commercial Lines