Lithium battery risks in 2025: What’s changed and how to protect yourself

Lithium-ion batteries power almost every aspect of modern life, from smartphones and power tools to electric vehicles and industrial machinery. But as their use has grown, so too have the risks.

According to new research from QBE, UK fire brigades are now tackling at least three lithium-ion battery fires every day, marking a 93% rise since 2022. E-bikes alone accounted for nearly a third of these incidents last year, underscoring how widespread and unpredictable these fires can be.

As these incidents increase, insurers are becoming more cautious about the risks linked to lithium-powered devices, especially in storage, logistics, and manufacturing environments. For businesses that handle or store batteries, proactive risk management is no longer optional, it’s essential.

Understanding the unique characteristics

Unlike traditional fires, lithium-ion battery incidents present multiple hazards. The risks associated with these batteries can lead to a fire and/or an explosion with little or no warning. Additionally, lithium-ion batteries present fire, explosion and toxicity hazards through the release of flammable and noxious gases during rare thermal runaway events.

The primary concern centres around thermal runaway – a dangerous condition where the temperature in a battery can rise from 212°F (100°C) to 1,800°F (1000°C) in a second, creating an uncontrollable, self-heating state that can lead to fire or explosion.

These characteristics make lithium-ion battery fires particularly challenging for emergency responders and create additional considerations for business continuity planning.

Why insurers are reassessing lithium risks

The insurance industry’s growing caution is backed by mounting claims data.

It’s not just households that are being affected by the growing risks linked to lithium-ion batteries. New research from Aviva highlights a worrying trend across UK businesses, with many experiencing battery-related incidents, yet few are taking sufficient action to manage the risk.

More than half of businesses (54%) have experienced an incident involving lithium-ion batteries such as smoking and overheating to full explosions. Nearly one in five (19%) have even reported fires or explosions in the workplace. With these batteries now commonplace across business operations (powering mobile devices, laptops, warehouse equipment, e-bikes and even electric vehicles) the risks are becoming increasingly difficult to ignore’.

Despite the growing number of incidents, Aviva’s research shows that many organisations are still not following key safety protocols:

• Only 52% of those affected avoid overcharging batteries.
• 51% use genuine, compatible chargers.
• Fewer than half ensure well-ventilated charging areas (46%) or maintain charging equipment (47%).

“Insurers across the industry are increasingly concerned about the risks associated with lithium-ion batteries, particularly those used in e-bikes, scooters, hoverboards and the like. The potential for thermal runaway and fire is significant. For importers, exporters, distributors, and warehouse operators, it’s no longer just best practice but essential risk management to ensure robust safety protocols are in place, that their insurers are fully informed, and that their policies accurately reflect the specific risks involved in storing and handling these goods.” Danial Wright, Client Director.      

Training is an important part of ensuring safe practices, but additional insights from Aviva reveal that only 35% of respondents reported regular training on the safe use and handling of lithium-ion batteries, with a further 35% providing occasional training. A worrying 15% don’t offer any training and of these, and  10% have no plans to train staff in the future.

Building a stronger battery risk management strategy

What steps can I take to reduce my risk? (and ease the concerns of my insurer)

1. Correct storage and charging procedures: Lithium-ion batteries should be stored in cool and dry places to prevent them from getting damaged, and to reduce the risk of overheating (making sure to keep them away from direct sunlight and extreme temperatures). To keep batteries safe, adhere to the Material Safety Data Sheet(s), use the correct chargers and follow the recommended guidelines for voltage and current. It’s also good practice to store loose batteries in protective cases to stop them touching things that conduct electricity, which could lead to sparks.
2. Trusted sources: An often-overlooked factor is where the batteries have originated from. They should be sourced from reputable manufacturers and suppliers only, as trusted sources are more likely to meet strict safety and quality standards, which reduces the risk of defects that can cause fires. Suppliers should meet international safety standards such as the ISO (International Organisation for Standardisation), and batteries should be fully tested and quality checked.
3. Risk management tools: Thermal imaging cameras can be used to check how hot batteries are when in storage or when charging by spotting any overly heated areas before they become an issue. BMS (Battery Management Systems) can also monitor and control  battery health, including charge and temperature.
4. Fire risk assessment: Regularly check stored batteries for signs of damage, such as swelling, leaks, or changes in shape. If a battery is damaged, dispose of it right away to avoid the risk of fire. It’s also vital to ensure fire suppression and handling equipment is available near where you store batteries, and staff should be trained on what to do in case of an emergency.

Innovation and the Path Forward

The landscape of lithium-ion battery risks continues to evolve as technology advances and usage patterns change. Businesses that proactively address these risks through comprehensive insurance strategies and robust safety protocols will be better positioned to navigate this challenging environment.

At Macbeth, we specialise in helping businesses navigate complex insurance challenges, including emerging risks like lithium-ion batteries. 

We’re always happy to help, so don’t hesitate to call or email us to discuss your insurance requirements, and how we can protect your business against these evolving risks.