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Managing risk around electric vehicles

By Elwira Ceglowska
Fleet Technical Underwriter Team Lead, Commercial Auto

With the Canadian Government proposing to ban the sale of new fuel-burning cars and light-duty trucks by 2035, the future of driving is electric

The number of EVs on the roads in Canada is still quite low. New electric vehicles (EV) registered in Canada in 2021 represented just 5.3% of total vehicle registrations for the year.

Numbers are increasing though. EV sales reached a six-month record, with 55,600 EVs sold in the first half of 2022; a 35 percent increase over the same period in 2021. As the cost to produce batteries continues to fall, EVs are expected to become more affordable, which should contribute to further growth in EV sales.

Customers will also need to have greater confidence in vehicle battery life and the charging infrastructure available, to help combat ‘range anxiety’. To that end, the Government of Canada has launched a Zero Emission Vehicle Infrastructure Program  (ZEVIP), a $680 million initiative ending in 2027, to increase the availability of localized charging and hydrogen refueling opportunities.

Risk considerations

As more drivers take to the road in EVs, and the number of charging points grow, there are several risk and insurance implications for businesses:

Property fire

There is significant risk of fire whilst vehicles are charging, particularly in confined locations such as underground or multi-storey car parks, and garages. As EVs become a mainstream choice, we will undoubtedly see other business premises, such as hotels, gyms and care homes, installing charging points to accommodate employees and customers. Charging infrastructure will also need to grow for commercial vehicles.

A fire can have a devastating effect on a business. To help businesses prepare, UK-based RISCAuthority and the Fire Protection Association have published a useful guide to fire safety when charging electric vehicles, which includes fire risk assessment, fire safety management and other safety considerations.

While aspects of their document are specific to the UK, most of the advice provided is relevant in Canada.  You can download RC59: Recommendations for fire safety when charging electric vehicles here

Battery Fire

Whilst most EV/hybrid battery fires start during charging, it is possible for Lithium-ion (Li-ion) battery faults to trigger a fire at any time, even if there has not been an accident. Battery faults can develop due to impact, severe jolting (e.g., heavy curbing), during a charge cycle or from excessively high/low temperatures. 

Any damage to the battery can trigger a chemical reaction causing the cells inside to severely overheat and enter ‘thermal runaway’, which can then lead to a fire.

A thermal runway event can be initiated and develop for hours or days before it becomes visible and there is a temperature ‘point of no return’, which when reached will uncontrollably increase and become irreversible.  Li-ion battery fires also release a flammable and toxic vapour which helps to further fuel the fire.

No person should attempt to manage an EV/hybrid that shows signs of smoke.  A Li-ion battery fire cannot be suppressed using normal firefighting methods, extinguishers or hoses – and it can also reignite after being extinguished initially.  Drivers, passengers and by-standers should evacuate and stay at least 10m away while emergency services are called.  The explosive force of a Li-ion fire and thermal runaway release can throw hot metal and burning chemicals several metres.

Charger installation and management

Chargers should be installed and maintained by a licensed electrician (check for province specific permits) and equipment certified for use in Canada by a nationally recognized certification agency, such as Canadian Standards Association, Underwriters Laboratories Inc., or Intertek Testing Services.

You can visit the Electrical Safety Authority for a full list of certification marks:

Charger location

Locations for new charging stations must be secure to minimize risk from unauthorized use, vandalism, or theft. Just as thieves have found new ways to steal keyless vehicles, we’re seeing an increasing number of thefts of car charging cables. Businesses should also equip facilities for firefighting, and plan for the possibility of a fire spreading to the surrounding area.

Vehicle repair

Repair costs and timescales for EVs, compared to conventional vehicles, will be higher in the short-to-medium-term as the vehicle repair industry adjusts. Due to the cost of batteries, there is also potential for more vehicles to be considered a total loss from an insurance perspective.

In vehicles with an electrified powertrain, there are risks in that they contain and store energy and could cause serious harm or death to technicians if not managed correctly. Repair guidelines will include:

  • A triage procedure to identify the safety status of all electrified vehicles.
  • Personal Protective Equipment checked and inspected before approaching the vehicle.
  • The appropriate level of training and competence for technicians assigned to work on EVs.

Post-repair, consideration will need to be given to:

  • Necessary time, resource, and equipment to correctly charge the vehicle battery before returning to the customer.
  • Safe disposal of hazardous components, such as traction battery packs.

Vulnerable road users

EVs are much quieter than other vehicles and can present a risk to vulnerable road users, including cyclists and visually impaired pedestrians. In the US and UK, regulations require new EVs to have a noise-emitting system which produce a sound similar to a traditional engine.

While this idea is under consideration in Canada, for now, EVs sold in Canada are currently not subject to this requirement. EV owners may consider purchasing an artificial noisemaker, designed to produce sound at low speeds for pedestrian safety.

Driver training

Drivers new to EVs should familiarize themselves with walkaround checks to spot any potential issues. A small accident in a conventional car may not pose a problem, but any incident that could lead to battery damage in an EV is a potential fire risk and should be reported and investigated.

Battery State of Health (SoH) benefits from:

  • Maximizing efficiency (e.g., switching to eco mode).
  • Monitoring speed to reduce energy consumption.
  • Caution around instant acceleration.
  • Awareness of regenerative braking, where the vehicle slows down when pressure is removed from the accelerator, and how it impacts stopping distances.
  • Avoiding unnecessary acceleration and braking.

Risk management services for QBE customers

Depending upon the size and complexity of the business needs, QBE customers can access a wide range of risk management services, self-assessment questionnaires and risk management toolkits which are focused on the key causes of claims, and on generating action plans for improved outcomes - including protecting employees, reducing risk and making claims less likely.

Your Contact

Your Contact

Elwira Ceglowska

Elwira Ceglowska

Technical Underwriter Team Lead

Need to claim? Report it early

Finally, a reminder that if you have an incident and need to make an insurance claim, it’s important that you report it as soon as possible, ideally the same day. Reporting a claim early can save time and help you to receive any claim payments faster, as well as allowing us to help mitigate the cost of third-party claims.