Allianz issues EV battery warning after £6.5m spent to cover fires

Allianz UK has issued a warning about electric vehicle (EV) battery fires after over £6m was forked out to cover blazes at multiple motor trade buildings.

Lithium-ion batteries, used in EVs, have been identified as a potential risk due to their thermal instability.

Two recent motor trade premise fires resulted in over £5m and £1.5m worth of claims, Allianz said.

Both were the result of a faulty EV battery that had been removed and was stored at the garage awaiting collection from the manufacturer for investigation.

“When damaged, mishandled, stored or transported incorrectly, these batteries can experience ‘thermal runaway’, a rapid self-heating fire that can lead to explosions which can happen days or even weeks later,” Allianz said.

“Motor traders frequently interact with EVs, but the risks are heightened when vehicles are showing signs of battery defects or are subject to recalls or advisory notices linked to the battery.

“Businesses with high vehicle throughput, such as sales companies and repairers, are particularly affected.”

Portable hand tools

The insurer also warned that many portable hand tools contain lithium-ion batteries that can cause severe damage.

For example, a recent fire at a tyre fitting centre resulted in a £250,000 claim after a power tool caught fire whilst being charged.

Olivia Baker, head of motor trade at Allianz UK, added: “The severity and financial impact of lithium-ion battery fires are considerable.

“Due to the chemical reactions and toxic material that are left behind, these fires can render buildings beyond economical repair.

“Understanding the risks and implementing effective prevention and management strategies are crucial to safeguarding businesses and ensuring the safety of employees, though thankfully at the moment the total number of claims is relatively low.”