Electric vehicles (EVs) are becoming increasingly common in dealerships, bringing with them a risk that is often overlooked: lithium-ion battery fires. As EVs become more prevalent, the potential for these types of fires poses significant challenges for dealerships.
A recent incident at a dealership highlights this risk. A lithium-ion battery fire was contained within 30 minutes but still led to an $8 million insurance claim. The costs stemmed not only from direct fire damage but also from cleanup efforts, air quality testing, disposal of contaminated inventory, and over a month of lost business income.
The insurance implications are extensive, affecting building coverage, contents, business income, garagekeepers policies, pollution liability, general liability, inventory protection, and workers’ compensation. Insurers are now scrutinizing these risks more closely during underwriting.
New standards like NFPA 855 and NFPA 800 emphasize proper battery storage and emergency response protocols. Sprinkler systems have become standard due to their effectiveness compared to clean agent suppression systems. In some cases, allowing the fire to burn in a controlled outdoor area may be the safest approach.
Dealership technicians face unique risks when working on EVs. Only certified technicians should handle high-voltage systems using personal protective equipment (PPE), including electrical gloves and insulated tools. Safety protocols should include AEDs and CPR training.
With EVs here to stay, dealerships must address these new challenges head-on to prevent potentially catastrophic outcomes from lithium-ion battery fires.