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Insurance companies in the face of lithium-ion battery risks

Lithium-ion batteries have become the most widely used battery technology in various fields such as automotive, power generation, communications, industry and other applications, including private ones.

The progress of this technology is considered very positive, so much so that the use of this type of lithium-ion batteries is increasing in more and more devices and with greater energy storage capacity. This circumstance poses a challenge, not only from the point of view of prevention and protection, but also from the point of view of the insurance sector.

This session [access our summary of the APICI session] has tried to explain the risks of using this type of lithium-ion batteries, the causes that lead to Thermal Runaway or overheating and the safety measures that should be studied according to the use for which they are intended.


Key Aspects

The main risk in the use of this type of battery is that of fire, since lithium-ion batteries combine high-energy materials with electrolytes, often flammable. Any damage to the separator inside the batteries can cause an internal short circuit with a high probability of Thermal Runaway. Once a cell has experienced thermal runaway and fire, it is very difficult to put out; practically until the battery runs out, it can continue to burn, unless very large amounts of extinguishing water are used.

Damage to lithium-ion batteries can result from, among others, internal design/manufacturing defects, physical damage, mechanical effects, undetected aging, wear and tear, thermal effect, and electrical effect.

The problem found from the insurance standpoint is the diversity of uses; very different conditions of use; areas with the existence of different uses and risks; increasing capacity for energy storage; lack of regulation/standards and difficulty in the control and extinguishment of the fire and action procedures in case of emergency.

As discussed in session 1 of the APICI conference, security measures must be adapted on a case-by-case basis depending on the use of lithium-ion batteries, so the proper use of batteries must be considered as general security measures; batteries; the existence of a BMS/Battery Control system, charge-discharge process; the need for a certain compartmentalization or separation; control of ambient temperatures and humidity; the installation of generated gas detection systems and fire detection and extinguishing systems; and procedures for security and action in the event of an emergency.



To limit the likelihood and consequences of a lithium-ion battery fire, a comprehensive safety strategy must be adopted that includes:

  • Risk prevention, physical separation, early detection, active extinction and intervention actions.
  • Each application or use requires a specific fire prevention and protection solution, since there is no protection concept that adapts equally to all applications.


Article author:

María Teresa Queralt, Technical Department Expert at MAPFRE Global Risks.





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