Electric vehicles (EVs) are no longer a niche offering on the lot. Whether you're selling them directly, servicing them, or simply taking them in on trade, there's no avoiding the increased presence of EVs in your dealership. And with that presence comes a growing and underappreciated risk: lithium-ion battery fires.
While EVs offer efficiency and innovation, lithium-ion batteries introduce a new level of exposure that most dealership facilities were never designed to handle. Unfortunately, we’re now seeing just how serious that risk can be, especially when it comes to insurance claims, operational downtime, and employee safety.
Consider this: a recent lithium-ion battery fire at a dealership started small and was contained within 30 minutes. However, it still resulted in an $8 million claim. Why? Beyond the direct fire damage, the cleanup and remediation were extensive. Air quality tests, disposal of contaminated inventory, and over a month of lost business income turned a relatively minor incident into a financial nightmare.
If a lithium-ion battery fire occurs, what part of your insurance policy responds? The answer could be almost all of it. Building, contents, business income, garagekeepers, pollution, general liability, inventory, and even workers’ compensation could be triggered.
As insurers begin to see more of these claims, they’re asking tougher questions during underwriting:
Being proactive is no longer optional.
NFPA 855 and emerging standards like NFPA 800 are setting the tone for proper battery storage and emergency response:
Sprinkler systems are becoming the industry standard, especially as clean agent suppression systems have proven less effective. In some cases, the safest approach may be a “let it burn” strategy in
a controlled outdoor area far from structures.
Technicians working on EVs face risks that traditional vehicles don't present. That's why only certified technicians should handle high-voltage systems; even then, personal protective equipment (PPE) is essential. Electrical gloves (with under- and over-gloves), insulated tools, signage, and buddy systems are part of the new norm. AEDs and CPR training should also be included in your dealership's safety protocols.
Here’s where to start:
EVs are here, and with them come new challenges that dealerships can’t afford to ignore. A fire that once might have cost thousands could now result in millions in damages, operational shutdowns, and liability exposure.
Want to learn more about the risks and best practices around EVs? Watch our recent webinar replay here.
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