Lithium Battery Fires and EV Charging: What Real Estate Owners Need to Know

Sarah Thompson: Hi, I’m Sarah Thompson, real estate practice leader in Canada for HUB International. Real estate owners and operators are always balancing opportunity and risk. New technology is a great example. It can make properties more convenient and efficient and attract tenants, but it can also introduce risks that need to be understood and managed.

Sarah Thompson (cont’d): I recently sat down with Michael McBride, one of the risk advisors here at HUB, to talk about one of those risks: lithium battery fires and EV charging. It’s an issue that’s affecting property owners across North America, and Michael shared some great practical insights on what owners should be thinking about now. Here’s our conversation.

Sarah Thompson: I’m here in Vancouver and I’m sitting with Michael McBride. Mike, maybe a quick introduction.

Michael McBride: Sure. I’m the property risk control practice leader for HUB and I sit in Philadelphia. Glad to be with you today, Sarah.

Sarah: Yeah, thanks, Mike. We’re here talking about real estate and lithium batteries. Lithium batteries are everywhere now — scooters, e-bikes, electric vehicles. Property owners are dealing with a new risk they may not have planned for. What’s happening?

Michael: Have you ever ridden an e-bike before, Sarah?

Sarah: I have, yeah.

Michael: They’re a lot of fun. I’ve ridden one once, and it was in your beautiful city of Vancouver. But I’m still more of a manual bike guy. You can see why it’s growing though — from $40 billion in 2022 to $300 billion expected in 2030. And with all of that growth, we can expect a greater risk. Lithium-ion batteries carry higher risk, and mobility devices bring them into living spaces, so it’s becoming an issue.

Sarah: So what makes lithium battery fires different from other fire risks that property owners are already used to managing?

Michael: There are actually three key issues. Number one: they burn much hotter — about twice as hot as a traditional fire. Number two: the metal oxides break down and liberate oxygen, so the batteries actually feed the fire themselves rather than just drawing oxygen from the atmosphere. And finally, they are enclosed, so it’s hard to get at the material that’s actually burning.

Sarah: Interesting. So it’s not just about the risk of fire itself, but understanding the specific nuances of lithium battery fires and how to prepare for those differences.

Michael: Absolutely. We’ve built these buildings over the past 150 years without thinking about lithium-ion batteries being stored in them. We thought about wood and plastics to some extent, but now we’re seeing a totally different chemical risk being introduced into people’s living spaces. We really need to be thinking proactively about what to do with these devices.

Sarah: From an insurance perspective, what are underwriters and insurance companies concerned about with lithium battery risks?

Michael: Well, obviously, they’re seeing more losses. At the same time, they do have a social responsibility — they want to help society do better. They’re not really changing policy wording so much; it’s really about looking at how we can manage the risk from a risk management point of view.

Sarah: So while it’s covered from an insurance perspective, property owners really should take note of the added risk and take measures to address it.

Michael: Yeah, that’s the key part. It’s not about being passive and just letting this happen. It’s really about recognizing there are things that can be done to mitigate this exposure. And the insurance companies are certainly at the forefront of talking about that.

Sarah: So what are some practical examples of what property owners should be doing? Should they just ban these devices from their buildings entirely?

Michael: That would be interesting given how fast this is growing — they’d probably have half-empty buildings. Really, it’s about recognizing these are here to stay and there are ways to manage. It’s updating lease language, creating handouts that help people understand what the risks are and what they can do. For example, making sure only UL-listed or ULC-listed e-bikes are used on the property. You can also establish storage protocols. Ideally, having a separate room is great, but a lot of these are older buildings. So the conversation with tenants and owners needs to happen: don’t store these devices in walkways and exit paths, because if there’s a fire, you’re not going to get out. And have an emergency plan. Don’t let this be happenstance — think ahead about what needs to be done and communicate that to your tenants.

Sarah: Those sound like pretty straightforward pieces of advice. Why do you think more building owners aren’t doing these things?

Michael: I think it’s human nature, right? We all tend to learn the hard way. We’ve spent our careers helping people recognize that bad things happen even when you’re trying to do the best job possible. That’s where we come in — helping our clients, whether it’s an individual or a building owner, recognize the risk and take steps. And a lot of times they just don’t know. Rather than enforcement, we should think of it as education.

Sarah: What is HUB doing to help property owners get ahead of this?

Michael: We have general literature that we can pass along to our clients, and that helps a lot. But we also have 100 consultants who can really collaborate and partner with our clients and with tenants to help deliver solutions that are simple and can be implemented very easily.

Sarah: That’s all great, Mike. Bottom line — one takeaway. What’s the one thing every property owner should take from this conversation?

Michael: Don’t sit and wait for something to happen. Get ahead of it. Come up with guidance, and then find ways to educate and collaborate to actually see those solutions implemented. Don’t be passive.

Sarah: Excellent. Thanks so much, Michael. I appreciate your time today.

Michael: Thank you. Great chat.