Lithium Safety Measures for Your SME

Lithium-ion batteries are increasingly dominant in Australia and globally as a form of rechargeable battery technology. They are used across various industries from light to heavy.

Global demand for lithium batteries is expected to reach up to $151B by 2030. In Australia, nine out of 10 people own a smartphone with such a battery.

Chances are lithium is powering a suite of device at your home and business. Typically, lithium batteries are in laptops, phones, external keyboards, tablets, tools, forklifts, cameras, security and alarm systems, e-bikes, e-scooters, vapes, golf carts, drones, toys, camping equipment, cordless vacuum cleaners, back-up power systems, electric vehicles and to store energy from solar or wind.

Lithium batteries’ popularity stems from their long lifespan, versatility and being very energy dense. There are six common types of lithium-ion batteries.

While lithium batteries offer numerous benefits, managing potential safety risks is crucial to ensure uninterrupted business operations.

Understanding the Risks of Lithium

Risks span manufacturing, use, storage, and disposal off such batteries.

Compliance with regulations and ensuring the safety of employees and customers should be at the forefront of your strategy. A quarter of complaints about lithium batteries are about injuries or incidents, mostly about burns.

We’ll explain how the chemistry of lithium batteries leads to risks including:

Other ways lithium batteries can cause issues is through defects or contamination introduced during manufacturing, short-circuiting, overcharging, or using non-compliant charging gear. Hazards occur due to repurposing, modifying or customised battery applications – second-life, and DIY retrofitted, or example.

Regulatory Framework for Managing Lithium 

The Australian Competition & Consumer Commission (ACCC) last December issued its report on lithium-ion batteries and product safety. It says there is no law to generally prohibit the sale of unsafe goods in Australia. This implies that the current regulatory framework does not comprehensively address the hazard of lithium batteries.

Meanwhile, the Australian Dangerous Goods Code (ADGC) addresses transportation risks and there are testing requirements that vary by state.

But, don’t expect that regulatory vacuum to continue. The ACCC and the CSIRO have recommended a range of consumer advisory measures, a star quality rating system, and harmonising battery recycling standards and regulations nationally. It also called for improvements in incident data and to expand and standardise data collection on hazards of consumer electrical products and offered recommendations on the electrical safety framework.

However, the ACCC report has underwhelmed some industry experts who say it shifts responsibility to states and territories.

Nevertheless, if lithium batteries your business uses cause injuries or property damage, you’ll need to manage those risks or face legal or financial repercussions

Risk Assessment for Businesses Using Lithium Batteries

One risk to consider is if your business premises were damaged due to a fire caused by an electric car battery in the basement. That may trigger either the car owner’s insurance policy and/or the building owners. These sorts of incidents are still being tested in court.

Check if your premises is equipped with fire extinguishers specific to dealing with lithium battery fires. Are you storing lithium batteries safely (see below)?

Avoid handling, transporting or storing lithium batteries in excessive heat, direct sunlight, near open flames, smoking, poor ventilation, overcharging, or deep discharging (where you’ve exhausted the battery’s capacity).

Implementing Risk Management Strategies

The CSIRO advices against recharging a product in direct sunlight or in hot weather. As well, be mindful if you hear a hissing noise, notice liquid escaping from the battery or if components are beginning to melt. They’re all early warnings of thermal runaway.

Here are more useful tips:

• Store the batteries in a cool, dry place away from flammables
• Unplug chargers when using
• Allow batteries to cool before they are returned to use
• Avoid overloading circuits such as via one power point, and
• Dispose of spent or damaged batteries appropriately (as mentioned above).

Be sure to finetune your methods for evaluating the severity and likelihood of identified risks. Record and regularly review the risks through documentation – keep on top of your risk assessment process, too.

Environmental Considerations and Disposal

Ensure proper disposal of batteries that are damaged, such as those affected by fire, overheating, swelling, bulging, leaking, cracking, denting, or puncturing, or have been exposed to water or another liquid.

When disposing of such batteries, wear PPR, place the battery (if small) in a clear plastic bag or container and drop off at your nearest household hazardous waste collection point. Find out more here.

Conclusion

Boost your risk management with the right-fit insurance for your business circumstances. Talk to us to guide you.

123 Insurance Pty Ltd ABN 67 621 727 722 ATF for 123 Insurance Unit Trust ABN 46 332 885 229 trading as Bell Partners Insurance is an authorised representative 1259573 of Insurance House Pty Ltd ABN 33 006 500 072 AFSL 240954.
This advice has been prepared without taking into account your personal objectives, financial situation or needs. You should therefore consider the appropriateness of the advice, in light of your objectives, financial situation or needs before following the advice. Please obtain a copy of, and consider the Product Disclosure Statement applicable to the general insurance product before making any decision.