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The risks of lithium-ion batteries for business

The risks of lithium-ion batteries for business

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2025 November 17

There has been a lot of coverage in the media this year about lithium-ion battery-related fires and this is not just related to EVs. According to Fire & Emergency NZ (FENZ), the number of fires caused by the batteries has more than doubled since 2020.

Fires have grown from 51 in 2020 to 120 in 2024, with 42 recorded by April for this year alone.

Lithium-ion batteries are not just in EVs, but a lot of tools and equipment used by businesses and therefore pose a serious risk if not managed properly. Items people may not think about in this regard are forklifts, commercial drones, cordless drills, and even LED work lights.

To highlight this point, a Vero insurance survey in March, asked businesses about their use of energy technologies and storage. 11% of respondents said they used lithium-ion batteries, 10% used EVs, and 8% used solar panels with battery storage. 58% said that they weren’t sure if these items were used or not.

Costs and claims

One in five of the businesses surveyed had made a claim with Vero related to the use of energy technologies and storage. Insurer IAG has also seen a 17% uplift in these claims with mishandling during charging, storage, and disposal being the primary causes.  23% of those claims were related to commercial battery fires.

The cost of a fire is not just potential damage to your own property of course but the wider damage to neighbouring property, disruption to your business, and any resulting legal action. This was the case in May where a scrap metal yard was fined $30,000 following a battery-related fire that caused toxic smoke across parts of Auckland.

Risk mitigation and insurance

Given the growing propensity of these risks, understanding where lithium-ion batteries are used and how they are stored in your own organisation is critical.

When this audit is completed there are some key things you can do -

  1. Create a policy for employees using devices such as power tools, forklifts, and EVs. This should also apply to personal devices brought to work such as e-bikes and e-scooters, setting out where and how devices should be parked and charged.
  2. Storage of your batteries must be considered to help prevent a fire starting and spreading rapidly, with clear guidelines of how to dispose of old batteries. Whilst you may not cause a fire in your own premises, bear in mind that incorrect disposal has caused fires in over 14 rubbish trucks this year.
  3. Ensure that any tools and equipment containing lithium-ion batteries are regularly inspected and checked for physical damage, swelling, or leaking.
  4. Share this information with your broker so you can work though the associated insurance implications.

Have questions? We are here to help. Contact your broker or call us 0800 644 444.