Lithium-ion batteries have become both ubiquitous and essential to our modern lives. Utilised in our homes, workplaces, and transportation, lithium-ion batteries provide a readily available and reliable source of power for devices, such as cars, e-bikes, computers, and mobile phones.
However, lithium-ion batteries have introduced new fire and explosion hazards to our built environment. A UK fire brigade recently stated that lithium-ion batteries present the ‘fastest growing’ risk of fire (opens a new window) — causing 100 fires in South Wales in the last two years alone.
To help address this, a new Lithium-ion Battery Safety Bill (opens a new window) is currently going through the UK Parliament with actions to stop unsafe or non-compliant products from reaching consumers and with new rules to ensure their safe disposal. An existing EU Batteries Regulation (opens a new window) requires all waste batteries to be taken back by producers and producer responsibility organisations free of charge for consumers — regardless of the chemical composition, condition, country of origin, or brand of the waste battery. Similar rules are in place elsewhere in the world such as in some US states (opens a new window).
To mitigate threats associated with the storage and handling of lithium-ion batteries, robust property risk controls are essential for the commercial retail sector, especially when dealing with returned batteries from consumers.
Understanding the risk of ‘thermal runaway’
Lithium-ion batteries have a higher energy density than more traditional battery types, providing both a convenient and lightweight source of power. However, if battery cells generate more heat than they can dissipate, a ‘thermal runaway’ can occur; a rapid and uncontrolled release of energy and flammable products that can cause a fire or explosion. Potential causes of thermal runaway include manufacturing defects causing internal short circuits, mechanical damage, exposure to excessive heat, or charging problems.
The resulting fire can be intense — potentially releasing flames, smoke, and hazardous chemicals, and spreading fire to nearby combustible materials. Such fires can escalate quickly and be difficult to extinguish, requiring larger quantities of water for suppression — which may also challenge traditional fire extinguishing technologies and methods. Rapid fire development may also introduce challenges for evacuation; particularly if fire occurs close to an evacuation route.
The charging of batteries generally presents the highest risk of fire in normal use due to the potential for overheating and thermal runaway. However, if the battery is damaged, this can also result in thermal runaway. The higher the level of charge, the higher risk. Typically, packaged products will have a lower level of charge when first received, but returned products may have a higher level of charge and/or damage, increasing the fire risk.
In 2024, in the UK, 1.1 billion electrical items (opens a new window) containing lithium-ion batteries were discarded — resulting in over 1,200 fires in bin lorries and waste sites, according to not-for-profit organisation Material Focus. In May 2025 alone, a private waste management provider, Island Waste, reported seven fires in two weeks (opens a new window) at its processing plant, caused by lithium-ion batteries. Batteries in power tools present a particular problem, but other domestic products like vacuum cleaners and Bluetooth speakers are also an issue.
Mitigating risks during lithium-ion battery returns
The assessment of property risks and associated control measures will depend on a range of factors including, the type and size of batteries, if they are stored in bulk or within consumer products, charge level, and storage location and quantity.
Some considerations for commercial storage and retail facilities are provided below:
Risk assessment
Review and update the fire risk assessment to ensure battery related hazards are assessed and controlled in accordance with local fire safety legislation, such as the Regulatory Reform (Fire Safety) Order 2005 and Dangerous Substances and Explosive Atmospheres Regulations 2002 (DSEAR). Ensure any obligations for the return of damaged and waste batteries from consumers, such as The Waste Batteries and Accumulators Regulations 2009 (opens a new window), are correctly understood and implemented.Property protection and business resilience
Reinforce existing risk assessments by considering property protection and business resilience features (including a comprehensive Business Continuity Plan) to help keep losses small and improve recovery of the business. Liaise with your broker and property risk engineering provider to discuss any planned changes and control strategies.Management systems
Develop a management system for receipt, storage, handling, transit, and charging of lithium-ion batteries including, in particular, processes for the return of and/or damage to batteries or products containing batteries. The management system should consider standard operating procedures, storage arrangements, staff training, and emergency procedures. All changes should be managed though a Management of Change procedure.Transportation
Utilise hauliers with experience in carrying potentially hazardous goods, with transportation of any damaged batteries conducted in line with local regulations or legislative requirements, including use of suitable containers, packing, and signage.Goods receipt
Where damaged or faulty lithium-ion batteries are received, provide an appropriate handover area which is clear of combustible goods, has clear evacuation routes, is shielded from direct sunlight, and has adequate access for emergency services. Arrange immediate inspection of the items with clear definitions provided to classify damage and the corresponding actions to be taken.Storage
Minimise the storage quantity and duration of any damaged, returned or recycled batteries. Arrange prompt collection and removal. Store such products in an external, non-combustible facility or container a good distance from buildings or critical infrastructure. If space separation is not possible, provide robust fire compartmentation between structures. Avoid internal storage of any damaged, returned or recycled batteries. Where this is not practicable, provide a dedicated fire rated storage cabinet or room. Higher fire resistance ratings should be provided depending on the quantity of damaged batteries or products which are stored. Suitably approved fire doors, shutters and fire stopping products should be used. Appropriate heating/cooling systems should provided to maintain temperatures within manufactures guidelines. Consider the need for explosion venting, depending on the quantity of batteries stored. Ensure damaged or faulty lithium-ion batteries are not placed in general waste or standard ‘battery bins’ with other batteries.Charging
Prohibit charging of any batteries which are physically damaged or show signs of bulging, unusual odours, heavy cracking, or damage to the casing. Where batteries have lower levels of damage or faults, avoid charging of the batteries. Where this cannot be avoided, identify a safe area for charging operations and seek to minimise the number of batteries under charge at any one time. Ideally utilise an external, sheltered area, a good distance from buildings and critical infrastructure. Where this is not possible, prepare a dedicated internal area with safeguards such as fire rated compartment, clear of combustible construction and contents, clearly identified, provided with overcharge protection devices, ventilation, continuous occupancy during charging activities, and a clear strategy for fire detection and control. Proprietary ‘fire’ cabinets for the charging of lithium-ion powered battery devices are now available. Charging devices should be suitable, following manufacturers’ guidelines and regulatory requirements, suitably rated for the devices being charged, with surge protection and electrical inspections. Thermographic inspections could be used to identify any overheating of components or equipment.Self-inspections
Arrange daily inspections to check for instability or signs of distress. Any batteries or associated products of concern should be removed, if safe to do so, to an external ‘safe’ area a good distance from buildings and critical infrastructure and contacting the emergency services if smoke, gas or thermal runaway is observed. In addition, any batteries dropped or damaged during work activities on site should also be treated as ‘suspect’ and moved, if safe to do so, to a safe area. Thermographic cameras can be a useful aid to the inspection process.Emergency response
Develop a clear strategy for the detection, evacuation, and control of a fire event. Considerations include provision of automatic fire detection (ideally Category L1 or P1 to BS5839-1:2017) and alarm, automatic sprinkler protection to a recognised property protection guideline where practicable, off-gassing detection, interlocks to charging equipment, emergency response plans, liaison with the fire brigade, and fire water supplies.
Further help and advice available
The return of damaged or faulty lithium batteries presents a risk of fire or explosion which is increased at higher states of charge. Robust property risk control measures to identify, monitor, and segregate products of concern will help to reduce the risk of loss to the business enterprise.
A Need-to-Know Guide on Lithium-ion Battery Use and Storage has been prepared by RISCAuthority, providing risk control measures (opens a new window) for lithium-ion batteries. Various additional resources providing further guidance are available from insurers and other organisations.
For further information, please contact a member of our team or visit the Lockton Risk Control page (opens a new window).
