NIBA / Special Feature
of lithium-ion batteries, it is essential for residents, lot owners, tenants, strata committees, and building managers to understand the risks associated with lithium-ion batteries within strata communities and the potential implications for insurance, safety, and property protection,” he says. “Lithium-ion batteries are increasingly common in modern residential buildings and can be found in daily items such as, e-bikes, e-scooters, power tools, mobile phones, laptops and tablets along with motor vehicles. While generally safe when used correctly, lithium-ion batteries present a heightened fire risk when damaged, improperly charged, modified, poorly manufactured, or stored incorrectly. Residents and lot owners have joint responsibility to ensure items that have a lithium-ion battery are properly installed, used and maintained within the relevant product guidelines and Australian Standards.” Quantifying the risk A significant issue, says Luke Scott, is that the risk posed by lithium-ion batteries is challenging to quantify, as insurers do not currently collect detailed information on the presence or volume of e-bikes and e-scooters within strata buildings. Also, while the legislation surrounding EV chargers is robust, the rules governing e-bikes and scooters are less so. “We have comparatively stringent regulatory standards governing EV charging infrastructure, whereas e-bikes and e-scooters are more exposed to risks arising from low-quality or incompatible batteries and charging devices,” he says. “As a result, these devices represent a significant and emerging exposure within strata properties, driven by uncertainty around product quality, battery integrity, and charging practices. Should the frequency of such incidents continue to increase, it is likely that insurers will respond by introducing more targeted underwriting questions regarding their presence within buildings. In addition, policy wordings may evolve to place greater responsibility on owners
corporations and lot owners to ensure that any lithium-ion battery charging is undertaken in accordance with appropriate safety standards and utilises certified charging equipment.” The SCA report notes that insurers may increasingly seek information about EV charging infrastructure and battery-related exposures as adoption increases, and highlights that while there is no overarching legislative requirement to specifically disclose ownership of an EV within a strata scheme, any insured is subject to the ‘prohibition against making a misrepresentation’. The SCA says, ‘when entering into, renewing or extending a strata insurance policy, it is important that when asked by the insurer (either specifically or in a broader question relating to the provision of other relevant information in relation to the risk), they are notified of the presence of an electric vehicle and/or electric vehicle charging infrastructure, to ensure that the strata scheme may not potentially be in breach of this requirement.’ In addition to the presence of EVs and the installation of charging equipment, it's important to ensure strata residents are educated about safe charging and compliant equipment more broadly. Jonsson says, “When lithium-ion batteries are used correctly, our experience to date has been no measurable additional risk. When they're not maintained, are misused or charged incorrectly, they do pose a threat of fire and explosion,” she says. “While media coverage has highlighted lithium-ion battery fires, they are usually linked to misuse or non-compliant equipment rather than the technology itself. There have been isolated incidents such as in North Bondi where an e-bike battery left on charge in a bedroom sparked a fire and forced residents to evacuate. In strata, one resident's behaviour can affect everyone in the building. “Simple measures make a meaningful difference, and we encourage schemes to be proactive by educating residents on safe charging. Counterfeit equipment is a major contributor to incidents, so
only manufacturer-approved chargers should be used, on hard surfaces in well-ventilated areas and not left charging overnight. Batteries should be bought from reputable manufacturers, kept away from temperature extremes and inspected for signs of swelling or damage. For strata committees, this presents an opportunity to support all residents through clear
guidance and communication.” A watching brief on a weighty issue
As far as weight issues are concerned, Scott believes it’s a case of monitoring load bearing capacities – because while it may not be an issue at present, it could become one in the future. “EVs can be up to 50% heavier than traditional internal combustion engine vehicles, primarily due to the weight of lithium-ion batteries. While EV adoption is accelerating in Australia, the majority of vehicles currently on the road remain conventional petrol-powered models. As such, the immediate structural risk posed by increased vehicle weight in multi-storey strata car parks is limited. “However, this dynamic is expected to evolve over time as EVs become more prevalent. In the longer term, the increased average vehicle weight may necessitate a reassessment of building design and construction standards to ensure that car parks and related structures maintain adequate load-bearing capacity and structural integrity. Chargers add value – sums insured adjust accordingly If a building has installed EV chargers, the sum insured will need to be increased to take these into account – as well as any other factors, such as inflation and the cost and timelines involved in repair. In many existing strata schemes, EV adoption may require substantial upgrades to common electrical infrastructure before individual charging points can be installed. The SCA report detailed an example of a 100-lot scheme requiring approximately $200,000 of infrastructure upgrades
50 / INSURANCE ADVISER JUNE/JULY 2026
Made with FlippingBook Digital Publishing Software