The core risk factors
Lithium-ion fires can escalate quickly and are notoriously difficult to extinguish. Insurers therefore look closely at how much energy is stored in one place, how highly charged the batteries are and whether a fire starting in one area could spread to others. Lower state of charge, smaller storage groups and good physical separation all reduce the potential severity of an incident and the size of any resulting claim.
Underwriters also consider the condition of stored batteries. Damaged, defective or recalled units are more likely to fail, so dedicated quarantine areas and prompt removal are important controls. Storage located near combustible materials, building exits, electrical switchgear or other critical equipment is viewed unfavourably, as is poor housekeeping that allows packaging and waste to build up around stored packs. Tidy, well-marked storage areas send a strong signal about overall site discipline.
| Factor | Lower-risk practice |
|---|---|
| Stored quantity | Documented maximums per area |
| State of charge | Retired batteries kept at low SOC |
| Separation | Spacing or fire-rated compartments |
| Damaged units | Dedicated quarantine and quick removal |
| Detection | Early warning for smoke, heat and off-gas |
Detection and response
Early detection gives people time to act before a single failing cell becomes a building fire. Smoke and heat detection are standard, and off-gas detection can provide even earlier warning that a cell is beginning to fail. Detection systems should be linked to audible alarms and, where appropriate, to monitoring services that summon emergency responders automatically outside working hours. Unattended periods are when early warning matters most.
Response planning should consider water supply, access for fire appliances and management of contaminated firewater. Insurers may ask whether the local fire service has been briefed on the site's battery storage, whether pre-incident plans exist and whether drills have been carried out. Evidence of that engagement often counts as strongly as the specification of the detection hardware itself. Relationships with local responders are built well before an incident, not during one.
- Smoke and heat detection linked to alarms
- Off-gas detection for earlier warning
- Out-of-hours monitoring and automatic call-out
- Pre-incident plans shared with the fire service
Showing that controls work
Documentation matters: storage limits, inspection records, training logs, incident and near-miss reports and maintenance records for detection systems. Underwriters want evidence that procedures are followed consistently, not simply that they exist on paper. Regular internal audits, with corrective actions tracked to completion, demonstrate that controls are active and that management takes battery risk seriously. Senior sign-off on audit findings reinforces that message and helps secure the budget needed for improvements.
Recognised standards and guidance, such as NFPA 855 for energy storage installations and applicable local fire codes, provide useful benchmarks. Aligning site practices with recognised guidance, and explaining any deviations with a reasoned risk assessment, helps underwriters understand the site and may improve both the terms offered and the willingness of insurers to provide cover at all. A clear, well-organised submission shortens the underwriting process considerably.