Use our lithium-ion battery checklist to spot hazards early and support a safer, more resilient workplace.
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Lithium Ion Battery: Safety Checklist

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Lithium batteries power many parts of everyday life. They&rsquo;re increasingly used in everything from smartphones and scooters to power tools and machinery. On a larger scale, they&rsquo;re used in energy-storage systems that provide backup electricity for utilities companies and commercial facilities.
While lithium-ion batteries provide many benefits &ndash; they have long lifespans, provide constant power, and are lightweight, to name just a few &ndash; they also pose a risk of fire and explosion.1
As the use of lithium-ion batteries becomes more widespread, and facilities increasingly rely on them for their own power supplies, companies need to take a close look at how to protect themselves.
To get started, here is an overview of lithium batteries, the risks they present, and how to mitigate them:
<h4>What are lithium batteries?</h4>
The term &ldquo;lithium battery&rdquo; refers to one or more lithium cells that are electrically connected. Lithium cells store and release power by converting chemical energy into electrical energy using lithium ions or lithium metal.2 
Lithium metal batteries are generally non-rechargeable and are often used in consumer products like calculators, pacemakers, remote car locks, and watches.3 Lithium-ion batteries are rechargeable and are used in devices such as mobile phones, electric vehicles, laptops, and power tools, as well as materials-handling equipment like forklifts.4,5
<h4>What are the risks?</h4>
Lithium-ion batteries are generally safe but, like any energy storage device, they pose health and safety risks. Thermal runaway &ndash; a process that can cause overheating &ndash; is often considered the greatest hazard related to lithium-ion batteries.6
With thermal runaway, the temperature and pressure inside the battery cells increase faster than the heat can be dissipated. This can happen for many reasons, such as external heat sources (for example, open flames and heaters), short circuits, or damage to the battery. 7 Damage can occur by physical impact (for example, being dropped or punctured), improper charging, or exposure to certain temperatures (hot temperatures and below freezing).8
Thermal runaway may result in the release of corrosive, flammable, and toxic liquids, and gases, which can be harmful to people. Fire or explosion can be caused by the intense heat and flammable liquids and gases from the battery.9
<h4>How can facilities with limited amounts of lithium-ion use and storage mitigate risks?</h4>
Reducing risks related to lithium-ion batteries requires a comprehensive look at proper use, storage, transportation, disposal, and more. Here are just a few recommendations:
<ul>
<li>Lithium-ion batteries should be stored at charge levels below 50%. Fully charged batteries have a higher energy density and greater risk of generating significant heat from short-circuiting due to internal defects. Batteries should also be stored at temperatures between four and 27 degrees Celsius.10 </li>
<li>Establish minimum distances between battery charging stations and any combustible materials. Stations for charging large-format batteries should be separated from other combustibles by at least three feet. Small-format batteries, like the ones used in power tools, should be set on a firm surface, and separated from combustibles by at least one foot.11</li>
<li>Regularly inspect batteries for signs of damage, such as bulging/cracking, hissing, leaking, or rising temperature. If there are signs of damage, safely remove the battery from service and discard in a fire-resistant bin, separate from other waste batteries.12,13</li>
<li>Make sure your workplace&rsquo;s ventilation and fire protection systems comply with applicable legislation, including building codes and fire codes, as well as occupational health and safety regulations.14</li>
</ul>
<h4>What are battery energy storage systems?</h4>
Battery energy storage systems (BESS) enable energy from renewables, like solar and wind power, to be stored and then released when the power is needed most, for example, during a weather-related outage. Lithium-ion batteries are the technology of choice for large-scale plants to help electricity grids ensure a reliable supply of renewable energy.15
In Canada, this emerging technology is part of governments&rsquo; plan for more clean energy. For example, a new battery storage project in Ontario &ndash; Oneida Energy &ndash; aims to help the province have a &ldquo;reliable, affordable and clean electricity supply.&rdquo; The storage facility will draw and store electricity off-peak and return the power to the electric grid when electricity demand is higher.16
There are promising uses for BESS in the commercial sector as well. Commercial buildings and factories can set up their own energy-storage systems to provide power during outages and to lower electricity costs. Cost savings are achieved when a business draws energy from the grid for battery storage when hourly costs are low, and then uses that stored energy when grid costs are high (a concept called &ldquo;peak shaving&rdquo;).17 McKinsey &amp; Company believes BESS has the potential to reduce energy costs by up to 80%.18
<h4>What are the risks of battery energy storage systems?</h4>
Fires caused by thermal runaway is the chief concern with battery energy storage systems. This can be caused by physical damage, manufacturing defects, improper use, and excessively hot storage temperatures. Storing large amounts of batteries together makes this situation more dangerous. The fire caused by a single battery can create a chain reaction of battery failure, which can lead to an explosion if enough batteries fail and produce heat and gas.19
<h4>How can organizations mitigate risks?</h4>
The National Fire Protection Agency (NFPA) and other expert organizations provide numerous standards, guidelines, and recommendations for battery energy storage systems. Companies are encouraged to consult comprehensive resources such as <a href="https://www.nfpa.org/product/nfpa-855-standard/p0855code">NFPA 855</a> (Standard for the Installation of Stationary Energy Storage System and <a href="https://ulse.org/news/ulse-publish">UL 9540</a> (Standard for Safety of Energy Storage Systems and Equipment), as well as information from their insurance partners and other experts.
Here are just a few recommendations to prevent fires:
<ul>
<li>One early intervention is a battery management system (BMS), which can prevent damage to the battery cells due to overcharging. A BMS also calculates the charge remaining on the battery, monitors the temperature, and monitors for short-circuits and faulty connections. If the system detects any abnormalities, it shuts the battery down, which protects the cells from damage. A gas detection system can also be employed to shut down faulty cells, activate a ventilation system, and sound alarms.20</li>
<li>Thermal imaging can be used to monitor the battery cells and prevent thermal runaway. Thermal cameras allow operators to detect temperatures in real time and quickly identify any issues. Thermal imaging is also a useful tool for detecting manufacturing defects in lithium-ion batteries. For example, a hot spot in the battery cell may indicate a defect that&rsquo;s causing the battery to generate excess heat. Early detection allows corrective action to be taken.21</li>
</ul>
See: <a href="https://www.sovereigninsurance.ca/advice-and-tools/managing-risk/risk-resilient-thermal-imaging">Risk Resilient: Thermal Imaging: Electrical &amp; Mechanical Applications</a>
<ul>
<li>To prevent large and lengthy fires, NFPA 855 requires energy storage systems to be grouped into small segments and spaced apart. Since battery energy storage systems typically consist of multiple vertical racks, the aim is to contain the fire to a single rack through proper spacing, as well as the installation of a sprinkler system.22</li>
</ul>
See: <a href="https://www.sovereigninsurance.ca/advice-and-tools/managing-risk/fire-safety-plan">What should be included in your fire safety plan?</a>
<ul>
<li>Develop an emergency response plan specifically for lithium-ion fires. These fires have unique attributes and are difficult to extinguish and sometimes need to just burn out. Water or foam may appear to put out fires quickly, but they can reignite as breached cells are met with oxygen. It&rsquo;s advisable to keep sprinklers running and move batteries to safe burnout areas.23</li>
</ul>
While the chance of a fire related to lithium-ion batteries is low when guidelines and best practices are followed, there are no guarantees. Reach out to your broker or insurance partner for guidance on how to best protect your facility.
&nbsp;
Sources 
1 Schumacher Electric, &ldquo;<a href="https://www.schumacherelectric.com/blog/the-benefits-of-lithium-ion-batteries/">The Benefits of Lithium-ion Batteries</a>,&rdquo; May 5, 2023
2,12 Occupational Safety and Health Administration (OSHA), &ldquo;<a href="https://www.osha.gov/sites/default/files/publications/shib011819.pdf">Preventing Fire and/or Explosion Injury from Small and Wearable Lithium Battery Powered Devices</a>,&rdquo; June 20, 2019
3,4 Transport Canada, &ldquo;<a href="https://publications.gc.ca/collections/collection_2017/tc/T86-30-2016-eng.pdf">Transportation of Dangerous Goods: Did You Know That Lithium Batteries Are Dangerous Goods?</a>&rdquo; March 2016
5 Modern Materials Handling, &ldquo;<a href="https://www.mmh.com/article/where_lithium_batteries_will_make_gains">Where lithium batteries will make gains</a>,&rdquo; Oct. 4, 2022 
6,8,9,14 Canadian Centre for Occupational Health and Safety (CCOHS), &ldquo;<a href="https://www.ccohs.ca/oshanswers/safety_haz/battery-charging-lithium-ion-batteries.html">Battery Charging &ndash; Lithium-ion Batteries</a>&rdquo;
7 Safety Skills: An HSI Company, &ldquo;<a href="https://safetyskills.com/lithium-batteries/">Lithium Batteries: Safe Handling, Storage and Disposal</a>&rdquo;
10,11,13 T&Uuml;V S&Uuml;D, &ldquo;<a href="https://www.tuvsud.com/en-us/-/media/regions/us/pdf-files/whitepaper-report-e-books/tuvsud-lithium-ion-battery-storage-and-handling-white-paper.pdf">Protecting Your Facility From Lithium-Ion Battery-Related Fires &amp; Explosions</a>&rdquo;
15 National Grid, &ldquo;<a href="https://www.nationalgrid.com/stories/energy-explained/what-is-battery-storage">What is battery storage</a>?&rdquo;
16 Government of Canada, &ldquo;<a href="https://www.canada.ca/en/natural-resources-canada/news/2023/02/governments-of-canada-and-ontario-working-together-to-build-largest-electricity-battery-storage-project-in-canada0.html">Governments of Canada and Ontario Working Together to Build Largest Electricity Battery Storage Project in Canada</a>&rdquo;
17 Daily Commercial News, &ldquo;<a href="https://canada.constructconnect.com/dcn/news/technology/2023/04/inside-innovation-battery-storage-for-commercial-buildings-comes-into-its-own">Inside Innovation: Battery storage for commercial buildings comes into its own</a>,&rdquo; April 19, 2023
18 McKinsey &amp; Company, &ldquo;<a href="https://www.mckinsey.com/industries/automotive-and-assembly/our-insights/enabling-renewable-energy-with-battery-energy-storage-systems">Enabling renewable energy with battery energy storage systems</a>,&rdquo; Aug. 2, 2023
19 &nbsp;Control Fire Systems, &ldquo;<a href="https://www.controlfiresystems.com/services/battery-energy-storage-fire-suppression-systems">Battery Energy Storage Systems Fire Suppression</a>&rdquo;&nbsp; 
20 StatX, &ldquo;<a href="https://www.statx.com/whitepaper/fire-suppression-battery-energy-storage-systems/">Fire Suppression in Battery Energy Storage Systems</a>&rdquo;
21 MoviTherm, &ldquo;<a href="https://movitherm.com/knowledgebase/understanding-the-risks-of-fire-in-battery-storages/">Ensuring Safety in Lithium-ion Battery Storages</a>&rdquo;
22 National Fire Protection Agency (NFPA) Journal, &ldquo;<a href="https://www.nfpa.org/news-blogs-and-articles/nfpa-journal/2020/01/01/nfpa-13-january">NFPA 855 and sprinkler protection for energy storage systems</a>,&rdquo; Jan. 1, 2020&nbsp;
23 T&Uuml;V S&Uuml;D, &ldquo;<a href="https://www.tuvsud.com/en-us/resource-centre/stories/lithium-ion-battery-fires-myth-vs-reality">Lithium-ion Battery Fires: Myth vs. Reality</a>&rdquo;

Lithium-ion batteries: Safe handling and storage

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While Pride Month shines a spotlight on the LGBTQ2S+ community each June, meaningful inclusion is a year-round effort. For Jessica Lavigne, Manager of Underwriting Assistants at Sovereign Insurance, Pride is an everyday, lived experience, so it&rsquo;s crucial that her workplace is an open, welcoming and safe place.&nbsp;
Jessica is involved with Sovereign&rsquo;s Proud of You Employee Resource Group (ERG), which supports the LGBTQ2S+ community within the organization. We spoke with Jessica about what diversity means to her, how being a part of this community has shaped her workplace experience and why representation matters.&nbsp;
What does diversity mean to you?
To me, diversity means individuals of all kinds&mdash;whether it&rsquo;s sexual orientation, disability, nationality, language and more&mdash;who come together in an environment where we can share our thoughts and learn from each other. Through these exchanges, we all become more inclusive individuals. Diversity is also what brings people&rsquo;s curiosity out and opens the door to a wealth of knowledge that benefits the whole organization.&nbsp;
What is your experience in insurance as a member of the LGBTQ2S+ community?&nbsp;
Overall, my experience in this industry has been positive. At times, some people are unsure or surprised when they hear I have a wife. But as we get to know each other, they see that I&rsquo;m a regular person, just like everyone else. Professional social gatherings can sometimes feel a bit challenging, but the more we talk openly about LGBTQ2S+ topics, the more it helps normalize who we are and makes things more comfortable for everyone. &nbsp;
How has this impacted your role at Sovereign?&nbsp;
I&rsquo;ve never felt like being who I am is a &lsquo;bad&rsquo; or negative thing. In fact, I&rsquo;ve seen how many opportunities are available to me here, and I feel like a valued and welcomed part of the larger organization. That has empowered me in my role to help create a safe and positive space for those around me.&nbsp;
Why did you get involved with the Proud of You ERG?
I joined Proud of You as a way to step outside my comfort zone and connect with others at Sovereign in the LGBTQ2S+ community. I&rsquo;m proud to be part of a group that helps build more awareness, knowledge and understanding across the organization. For me, it&rsquo;s about supporting others and sharing experiences to create a deeper sense of community.&nbsp;
Why does LGBTQ2S+ visibility and representation matter, especially in professional spaces?
Visibility helps create a culture of openness and acceptance. It creates space for people to speak openly and honestly about the struggles they face, encouraging mentorship and support within the community. But it&rsquo;s much more than a conversation. Seeing LGBTQ2S+ colleagues in senior or leadership roles has a positive impact by showing that being part of this community is not a barrier to growth and success. Pride Month is a great time to celebrate progress and share those stories, but what really stands out to me is how that support continues throughout the year at Sovereign. It&rsquo;s not limited to one month&mdash;it&rsquo;s part of our culture every day. And that&rsquo;s what makes people in this community truly feel like they belong. &nbsp;

Living proud every day: Jessica Lavigne on LGBTQ2S+ inclusion at work 

Purpose And Impact

Ten years ago, most businesses thought of equipment breakdown insurance in terms of boilers and busted belts. Today, the risks are more complex &mdash; and far more critical to operations.
&ldquo;Businesses are more automated, more reliant on digital systems, and increasingly exposed to frequent unpredictable weather events like extreme heat, cold and humidity, that can impact their equipment,&rdquo; explains <a href="https://www.sovereigninsurance.ca/our-team/toronto/allen-babista" title="" target="">Allen Babista</a>, Senior Manager, National Distribution, Equipment Breakdown, with Sovereign Insurance.
The equipment itself has evolved. A single sensor or piece of circuitry can now bring an entire machine &mdash; or an entire operation &mdash; to a halt. And with inflation pushing up repair and replacement costs, the stakes have never been higher.
<h4>Emerging risks and overlooked gaps</h4>
In this new environment, businesses can&rsquo;t afford to make traditional assumptions about equipment breakdown. &ldquo;The conversation used to be about mechanical breakdowns or fire,&rdquo; Babista explains. &ldquo;Now we&rsquo;re seeing failures in smart components, sensors, hybrid systems, and HVAC units &mdash; the kinds of risks that weren&rsquo;t even on the radar five or 10 years ago.&rdquo;
Too often, he says, these risks are underestimated. &ldquo;Equipment breakdown is sometimes treated like an afterthought. Clients don&rsquo;t realize that losses from these types of failures usually aren&rsquo;t covered by standard commercial property policies &mdash; and the impacts can be major.&rdquo;
In fact, climate-related claims are revealing just how vulnerable businesses have become. Heat waves and longer operating seasons strain HVAC systems. Extended cold snaps test machinery not designed for prolonged downtime. And the ripple effects, which can include costly business interruption, are often overlooked until it&rsquo;s too late.
<h4>From hardware to networks: what brokers should ask</h4>
Babista encourages brokers to help clients think beyond physical machines. &ldquo;Most equipment today is connected, whether to a cloud system, a network, or a remote sensor,&rdquo; he says. &ldquo;Ask clients, &lsquo;What happens if your equipment needs to run longer due to a changing climate? What if it doesn&rsquo;t start up after months of dormancy?&rsquo;&rdquo;
Equally important, brokers should review whether clients have the right business interruption coverage. &ldquo;That&rsquo;s their revenue stream,&rdquo; Babista points out. &ldquo;If the
equipment fails, they need to make sure they can still make ends meet and recover quickly.&rdquo;
<h4>Supporting smarter protection</h4>
Sovereign takes a tailored approach to equipment breakdown coverage, offering broad protection that includes mechanical, electrical, and electronic failures.
&ldquo;Whether it&rsquo;s production machinery or small devices, we work with our broker partners to understand what the client&rsquo;s actual equipment exposure is, and how best to protect it,&rdquo; he says.
Its dedicated underwriters, jurisdictional inspections, and in-house risk engineering teams help Sovereign identify and manage exposures before they lead to a costly claim. That prevention-first model is a key part of Sovereign&rsquo;s value proposition. &ldquo;Our goal is to take the worry off the client&rsquo;s plate so they can focus on running their business,&rdquo; Babista says.
<h4>Start with relevance, not hard sell</h4>
When brokers dig deeper and reframe equipment breakdown as a critical part of risk strategy, not just an add-on, they help clients build real resilience.
However, it can be challenging to bring these insights to clients who may not see equipment breakdown as a priority, Babista says.
&ldquo;Real-life examples go a long way. If a broker can say, &lsquo;Here&rsquo;s a claim that happened to a similar business and here&rsquo;s how it could&rsquo;ve been prevented,&rsquo; it opens the door to a value-driven conversation,&rdquo; he says.
Sovereign can support brokers with such examples and provide expert engineering insights and tailored risk advice. &ldquo;Being informed is the best way to be proactive, and we&rsquo;re here to help brokers do just that. Because protecting businesses today isn&rsquo;t just about replacing what&rsquo;s broken, it&rsquo;s about anticipating what can go wrong, preventing unnecessary downtime, and keeping operations running when the unexpected hits,&rdquo; Babista says. &ldquo;It&rsquo;s not just about the equipment. It&rsquo;s about everything that depends on it.&rdquo;
<a href="https://youtu.be/zwTD32BwWQQ">WATCH: Sovereign Insurance&rsquo;s expert provides top risk management tips to guide your next client conversation on equipment breakdown</a><o:p></o:p>

Lithium Ion Battery: Safety Checklist

Lithium Ion Battery: Safety Checklist

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