While the relationship between lithium-ion batteries and insurance has been marred by negative sentiments, 4Sight Risk Partners sees this as a temporary challenge rather than a perpetual path. Despite airlines banning e-bikes, e-scooters, and hoverboards, and some strata committees contemplating bans on their storage, we believe that with vigilance and the anticipated regulatory standards being established, a positive trajectory is plausible.
Admittedly, insurers have witnessed a 440% surge in claims and a staggering 900% increase in claim costs over the past three years. Insurers are grappling with the repercussions of claims across domestic dwellings, commercial warehouses, and vessels. This amplifies concerns about lithium-ion batteries impact on the insurers’ bottom line; and therefore increased premiums, policy excesses and/ or restrictions in the cover being provided.
Furthermore, the absence of a formal regulatory framework and mandatory safety standards, compounds the challenge at hand. Currently, Fair Trading is tasked with categorising compliant and non-compliant batteries, revealing an alarming 18% non-compliance rate of lithium batteries.
As insurers, property owners, injured parties and their lawyers seek recovery for damages, legal costs and punitive awards from manufacturers and importers, reliability, safety issues and the potential of class action suits will prompt a swift improvement in integrity from the lithium-ion battery industry. This will inevitably mean the phasing out of cheap and unreliable batteries from the market. As well as addressing the other issues surrounding lithium-ion batteries, including potential pollution concerns; as they are deemed hazardous waste, capable of producing heavy metals and toxic smoke.
4Sight Risk Partners feel the crux of the matter lies in addressing responsibility, liability and regulation. Navigating choppy waters in the coming few years necessitates regulators establishing safety standards for commuters and a consistent framework to mitigate the rising toll of injuries and fatalities. Business importing and manufacturing lithium batteries or products with lithium batteries must be aware they are considered the manufacturer in Australia under Australian consumer laws; hence they need to keep across all developments to protect their business.
In the interim, business and staff, as well as the domestic environment can adopt simple, practical, and cost-effective (free) measures to significantly minimize risks and increase safety for all. These include:
– Ensure a working smoke alarm is present in the room where batteries are charged
(e.g. End of Trip facilities at Offices; etc.).
– Charge batteries on non-combustible surfaces.
– Charge batteries in sheds or carports, away from living spaces.
– Disconnect the battery once fully charged.
– Do not charge damaged batteries (i.e. if there is blistering, swelling or bulging, leaking, overheating, crackling whilst charging and/ or punctured or crushed).
– Adhere strictly to manufacturers’ instructions and safety advice.
By embracing vigilance, common sense and practicality, we can collectively continue to enjoy the benefits of this innovative technology.
Reach out if your unique business relies on lithium-ion batteries as via our 4Sight Risk Partners IQ-ARTA process, we can provide you with more confidence you have your business and your team protected for its next journey.
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4Sight Risk Partners helps secure benefits for businesses from risk management. Drawing on 75 years of global expertise in risk and insurance, we help businesses tackle uncertainties and seize opportunities with more confidence. We protect our clients, providing them with a strategic advantage from their qualified risk profiles and quantified risk appetite.
Review our ‘IQ-ARTA’ Business Risk Framework and stay informed on news and legislative changes that could affect your business with our ‘Looking Forward’ quarterly update.
We welcome your call to discuss your unique business needs.
Gareth Jones
Managing Director
4Sight Risk Partners
0499 988 980
+61 499 988 980 if calling outside of Australia
Adviser Representative No: 1251287
For more information please visit: 4sightrisk.com.au
Or reach out for assets or further details to:
[email protected]
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