How to manage the risks of lithium batteries

These days, lithium batteries can be found everywhere, from smartphones and laptops to electric scooters, bicycles and vehicles.

But while they’re a critical element of modern life – and integral to Australia’s emissions reduction strategy – they have an element of risk attached to them which shouldn’t be ignored.

What is a lithium battery?

Small rechargeable batteries with a high energy density, lithium or lithium-Ion batteries use different chemicals and have different internal processes than regular batteries.

They’re highly flammable and can cause fires that result in property damage and serious injury, including smoke inhalation, chemical exposure and burns, if they overheat or explode.

This tends to occur if batteries are not used, charged or disposed of correctly, or if they’re used while damaged.

The Australian Competition and Consumer Commission received 231 product safety reports related to lithium batteries between 2018 and 2023, and one Australian reportedly died in a lithium battery fire during that time.

“They’re highly flammable and can cause fires that result in property damage and serious injury”

Handling lithium batteries safely

If your small business uses equipment powered by lithium batteries, it’s essential you take steps to help reduce the small but very real risk they can pose to your premises and people.

That means knowing where to store lithium batteries – in a cool, dry place, away from flammable materials.

Chargers should be unplugged once charging is complete, and batteries given time to cool down before they’re put back into use.

Also do not overload the circuits when you are charging the batteries. Too many chargers using the one power point when the building’s electrical infrastructure is degraded may be dangerous.

How to dispose of lithium batteries

If they overheat or show signs of failure, such as swelling or leaking, lithium batteries and chargers need to be disposed of safely.

They’re more likely to catch fire when they’re exposed to heat or moisture, or if they are crushed, so for that reason should be kept out of the regular office bins.

You can take them to a hazardous waste collection point or a battery recycling service, such as those operated by Bunnings, Officeworks and other retail chains.

It’s recommended you tape over the terminals before placing your lithium batteries in the collection bin.

To date, insurers haven’t excluded lithium battery fires from their business insurance policies but some of the issues around liability have yet to be tested in Court, according to Steadfast Broker Technical Manager, Michael White.

“If, for example, an office building was to be damaged as a result of an electric car battery fire in the basement, the question of whether the repairs should be covered by the car owner’s policy or the building owner’s policy may arise,” White says.

“Meanwhile, if you’re a small business owner, it makes sense to minimise your risk, by keeping all your batteries and the chargers in good working order and ensuring your premises are equipped with fire extinguishers that are designed to combat lithium battery fires.”

Cover to safeguard your business

Having the right insurance in place can help to protect your small business from a range of accidents and incidents.

Your broker or adviser can help you stay on top of emerging risks, such as that posed by lithium batteries, and make smarter decisions about the types of cover best suited to your circumstances. For a discussion about your requirements, contact your insurance broker or adviser today.


Important notice – Steadfast Group Limited ABN 98 073 659 677

This general information does not take into account your specific objectives, financial situation or needs. It is also not financial advice, nor complete, so please discuss the full details with your insurance broker or adviser as to whether these types of insurance are appropriate for you. Deductibles, exclusions and limits apply. These insurances are issued by various insurers and can differ.


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