July 2024

In the US, there were over 25,000 incidents of fire relating to lithium-ion batteries between 2017 and 2022.

The impact has been most pronounced in urban areas, where the use of e-bikes and e-scooters has grown substantially.

Incidents of lithium-ion (Li-ion) battery-related fires are increasing globally, leading to physical damage and personal loss.

The resulting claims have insurers reevaluating their liabilities, as businesses and policymakers seek to better understand the rise in incidents and take steps to mitigate the risk.

There are implications for the future of this technology, which is critical to the Net Zero transition and for businesses that rely on Li-ion batteries.

This Spotlight report draws attention to the rising exposure in urban centers and beyond and recommends risk management best-practices.

Key takeaways

  • Incidents of Li-ion battery-related fires are increasing globally, leading to physical damage and personal loss.
  • Globally, demand for Li-ion batteries is expected to surge sevenfold, to around 4.7 terawatt-hours (TWh) by 2030, driven in large part by demand for electric vehicles.
  • With large populations and demand for technology, urban areas have a high concentration of risk of Li-ion battery-related fires.
  • "Thermal runaway" is a cycle in which the temperature and pressure inside the cells of a battery keeps increasing, until it ignites and/or explodes.
  • The extreme heat generated by electric vehicle (EV) battery fires can reach up to 4,900°F (2,700°C).
  • Early detection systems are critical in controlling Li-ion battery-related fires, but they're still in the early stages of development.
The biggest underwriting concerns are thermal runaway situations that cause fires or explosions if the batteries are stored centrally without appropriate controls in place.
Tom Ryan, senior vice president, Casualty practice leader, Gallagher US


CONDITIONS AND LIMITATIONS Gallagher's global operations, including a network of correspondent brokers and consultants, offers client-service capabilities in more than 130 countries around the world. This report and supporting information is not intended to provide legal or financial advice and reflects our understanding as of July 2024. It should not be regarded as a comprehensive statement of the law and/or market practice in the regions covered. You should not act upon information in this publication nor determine not to act, without first seeking specific legal and/or specialist insurance and risk management expertise. Should you require advice about your specific insurance arrangements or claim circumstances, please contact your Gallagher account representative.

© 2024 Arthur J. Gallagher & Co.