By Gareth Jones, Managing Director, 4Sight Risk Partners
As lithium batteries power everything from e-bikes and e-scooters to drones, medical devices, and energy storage systems, Australian importers and distributors face a sobering reality. In the eyes of the law, you are the manufacturer—and chances are, you can’t get product liability insurance to protect yourself.
This means your role in the supply chain is a high-risk operating position, where legal and financial exposure is accelerating faster than the insurance market can respond.
Why Lithium Battery Importers Are Under Pressure
1. You’re Legally the Manufacturer
If you import lithium-powered products into Australia and the original manufacturer is offshore, you are deemed the manufacturer under Australian Consumer Law. That means you’re liable for fires, injuries, product failures, and recalls—even if you had no hand in the design or assembly.
2. Insurance Is Drying Up
The insurance industry is backing away from lithium battery risks. Since 2020, lithium-related insurance claims in Australia have risen by 440%, and average claim costs have skyrocketed nearly 900% (4sightrisk.com.au/Lithium). Most insurers now refuse to offer product liability insurance to importers or impose unsustainable premiums.
3. Batteries Are Failing Safety Standards
89,000 products with potentially dangerous lithium-ion batteries have been recalled in Australia (cityrural.au). Yet many importers unknowingly bring in non-compliant stock, unaware they’ll be held accountable for any harm caused.
4. Fire Hazards Aren’t Hypothetical
Thermal runaway, fire, and explosion risks are real and increasing. Warehouses, retail premises, and end-user sites now require specialised fire suppression systems and risk mitigation protocols. Without them, claims are not just likely—they’re inevitable.
Australia’s Systemic Risk: The Distributors with No Net
Australian laws demand that products come with clear documentation, warnings, and tested safety features. But distributors and importers—many of them small-to-medium enterprises—are now trapped between increasing liability and decreasing insurability.
This is no longer a hypothetical problem. It’s a structural risk to the industry.
What the ’80s Pharma Crisis Can Teach Us
The lithium battery market is beginning to mirror the pharmaceutical industry of the 1980s and ‘90s, when insurers walked away from emerging treatments and class action risks.
Pharma’s solution? Mutual insurance:
- Collective risk sharing between businesses facing similar exposures
- Embedded safety and compliance requirements to lift industry standards
- Regulatory support for a unified approach to risk and innovation
That model helped the pharma industry move forward. Lithium battery stakeholders should consider a similar path—especially importers and distributors left uncovered and exposed.
4Sight Recommendations for Importers & Distributors
1. Know your liability status
Accept that you are legally a manufacturer. Take responsibility and build a risk profile with qualified and quantified risks—giving you clarity and enabling you to make smart decisions.
2. Audit your product portfolio
Understand which items carry lithium battery risks. Assess safety compliance, documentation, and failure points.
3. Demand safety documentation from suppliers
Ask for testing reports, certification, and fire protection data before bringing products into the country.
4. Invest in safety at every stage
From packaging and labelling to warehouse controls and after-sales service, every touchpoint must reflect best-practice safety.
5. Advocate for a lithium battery mutual
Collaborate with like-minded importers, distributors, and risk experts to explore a mutual insurance scheme tailored for the sector.
The Path Forward
Australia’s lithium battery market is only going to grow. But without product liability insurance, the burden of innovation is falling unfairly—and unsustainably—on importers and distributors.
At 4Sight Risk Partners, we believe in practical solutions. The risks are known. The gaps are clear. Now is the time for leadership, collaboration, and a mutual path forward.
If you’re an importer or distributor of lithium battery-powered products, the message is clear: you can’t afford to wait for the market to fix itself.
The future is battery-powered—but only if it’s backed by shared safety, accountability, and smart risk strategies.
If you’re an importer or distributor, our IQ-ARTA Framework will help you identify, assess, and structure your risk profile—qualifying and quantifying your exposures so you can make smart decisions faster.
📞Let’s talk and help protect your business – Schedule a chat with me today.
Gareth Jones
Managing Director
4Sight Risk Partners
[email protected]
0499 988 980
+61 499 988 980 if calling outside of Australia
Adviser Representative No: 1251287
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Smart Decisions Faster.
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