The director of risk management solutions at insurer Aviva has said the market must educate its clients to the growing threat that comes from the increased use of litium-ion batteries.

Chris Andrews spoke to Emerging Risks as brokers gathered in Manchester for the annual BIBA Conference. He said the batteries came with new risks and that the market had to look at ways they could alert clients of the risks and how they can be better managed.

“We have seen a huge increase in the use of lithium-ion batteries for equipment, vehicles and everyday items in both the workplace and the home,” he explained. “We are seeing their use in fleets  and those fleet operators are also looking at the future use of hydrogen power, which will come with new health and safety and property risks.”

The batteries are extensively used in the new breed of forklift trucks used by British business.

“Their greater use is creating a new demand for battery energy storage systems, Andrews added. “We are seeing such systems in smaller premises but the come with risks that need to be understood.”

Their use in electric scooters and bikes has generated a huge amount publicity with a number of notable incidents where the batteries have caused major fires. The threat is such that New York has banned their use in the city and authorities in Paris are also considering a ban.

“The batteries can go into what is called thermal runaway,” added Andrews. “The biggest issue with this is once the battery ignites it is extremely difficult to extinguish and supress the fire. They can be immersed in tanks of water but can require weeks if not months before they are safe.

“Quite apart from the fire risk there is also the release of toxic substances.  Currently there no approved fire suppressant systems.”

Andrews is in Manchester to speak with brokers on a range of risk management issues but the discussion around lithium-ion batteries is a significant one.

“Their use will continue to grow,” he explained. “What  we don’t want is for familiarity to breed contempt. We need to educate  our clients and brokers will play a significant part in that process given they are the first point of contact with the client.

“This is not just an Aviva concern there are concerns across the market.”

Aviva is to produce a new loss prevention guide which will look to set out the risks the use of such batteries may pose and how they should be used and maintained.

“The risks are really from their creation to their disposal,” Andrews added. “We need to support our policyholders in areas such as how they can be safely used and maintained. The guide will also provide advice as how the batteries can be disposed of safely. Already it is an issue for the waste management sector.”