The business world is becoming increasingly dependent on lithium-ion batteries. These compact, rechargeable power sources have become an essential part of daily operations in industries ranging from construction and retail to restaurants and logistics. Their widespread adoption is largely due to their high energy density, efficiency and reliability.

However, as businesses integrate more battery-powered tools and devices into their workflows, they should also consider the risks and take steps to mitigate potential hazards.

While most people associate lithium-ion batteries with smartphones and laptops, their use extends far beyond personal electronics. They are the unseen force powering a growing number of commercial operations. In retail environments, handheld inventory scanners, digital signage and payment can systems rely on battery power to function efficiently.

Restaurants are incorporating lithium-ion-powered kitchen equipment, such as wireless food thermometers, temperature monitoring devices and even automated delivery robots.

The construction industry has embraced battery-powered tools and heavy equipment, including electric forklifts and site lighting, which reduce emissions and enhance job site efficiency.

Auto body shops rely on lithium-ion battery-powered tools like impact wrenches, cordless sanders and polishers for efficient, untethered repairs.

Beyond these more obvious applications, lithium-ion batteries are embedded in many everyday workplace essentials. They power wireless security systems, medical devices like portable defibrillators and emergency backup power supplies that keep businesses operational during outages. Many businesses unknowingly depend on lithium-ion batteries for critical functions, making it essential to assess both their benefits and the risks they introduce.

The rise of e-bikes and e-scooters has made commuting more convenient, but these lithium-ion-powered devices can pose unexpected risks when brought into businesses. Employees or customers may park them indoors, sometimes charging them in office spaces, breakrooms or near flammable materials without realizing the potential danger.

Though rare, fires from lithium-ion batteries have increased in numbers in recent years as the device’s popularity has grown.

A database of global lithium-ion battery incidents kept by UL Solutions, the global safety, inspection and certification organization, recorded 2,262 fires in 2023, an increase of 303% since it began tracking them in 2018. Battery fires also caused 773 injuries and 132 deaths, according to the database, which combs news articles for mention of incidents from around the world.

Among the biggest problems fueling the rash of fires is a seemingly endless supply of batteries that haven’t been safety tested and certified by an accredited testing laboratory, like UL.

🚨 Hidden Risks of Lithium-Ion Batteries

Despite their advantages, lithium-ion batteries present several hazards that businesses must address. One of the most significant risks is thermal runaway—a chain reaction that occurs when a battery overheats, potentially leading to a fire or explosion. According to the National Fire Protection Association (NFPA), battery-related fires have been rising in commercial settings, highlighting the importance of proper battery management.

When a battery is in use or charging, lithium ions pass between the anode and cathode—the negatively and positively charged parts of the battery—to generate a flow of electrons. All this energy can cause the cells inside the battery to heat up. Should faults occur in the cell, either due to internal failure or external conditions, they can enter into an uncontrollable state called thermal runaway.

It’s this phenomenon that makes a failure of a lithium-ion battery so dangerous, allowing fires to occur with little warning, according to Skip Donnell, a risk control professional at ERIE.

“When a fire starts, room temperatures can go from ambient to 1,300 degrees in just 60 seconds,” he said. “The fires themselves pose a unique problem because they can reignite, and there really isn’t any fire extinguisher designed to control them.”

Other key risks include:

• Battery degradation: Over time, lithium-ion batteries lose their capacity, which can result in swelling, leakage or combustion.
• Improper charging habits: Overcharging or using the wrong type of charger can increase the likelihood of overheating and shorten battery lifespan.
• Storage dangers: Storing damaged or defective batteries alongside functional ones can create a fire hazard.
• Environmental impact: Improper disposal of lithium-ion batteries can lead to toxic waste contamination, making it crucial to follow proper recycling protocols.

💡Tip: Never store batteries in direct sunlight or in high-temperature environments, as excessive heat can accelerate degradation and increase the risk of failure.

Best Practices for Safe Battery Use in Businesses

To minimize these risks, businesses should consider adopting stringent battery management policies. Proper storage and handling are critical—batteries should be kept in a cool, dry area away from combustible materials. Companies should also establish designated charging stations equipped with manufacturer-approved chargers to ensure safe operation.

✅ Key Safety Measures:

• Store batteries properly: Keep them in temperature-controlled environments and away from flammable objects.
• Inspect batteries regularly: Look for swelling, leaks or other signs of wear and remove damaged batteries from use.
• Train employees on battery safety: Ensure staff understands how to charge, store and dispose of batteries correctly.
• Have a fire suppression plan: Install extinguishers rated for lithium-ion battery fires and train employees on emergency procedures.

💡Tip: Use fireproof storage containers for large battery packs to reduce fire risk in case of failure.

Insurance Protection for Battery-Related Incidents

Even with the best precautions, lithium-ion battery incidents can still occur. That’s why businesses must ensure their insurance coverage includes protection against battery-related damage. Many assume their standard policies are sufficient, but specific risks associated with battery fires or failures may not be covered.

Businesses should review their policies to confirm they include:

• Property insurance to cover damages caused by battery fires or malfunctions.
• Business interruption coverage to help recover lost revenue if operations are halted due to a battery-related incident.
• Liability insurance to protect against claims in case a malfunctioning battery causes harm to customers or employees.
• Workers’ compensation insurance to cover injuries caused by battery-related accidents.

💡Tip: It’s essential to work closely with an insurance agent to ensure all risks are accounted for and that there are no gaps in coverage. Talk with a local Erie Insurance agent to help make sure your business is covered.