EV Fire Risk: A Protocol Guide to Marine Insurance

Protocol guide on managing EV fire risk in marine insurance, highlighting safety measures and coverage considerations for transporting electric vehicles by sea

Table of Contents

• The Unique Risk of EV Battery Fires

• Why Marine Insurers are Concerned

• New Safety Protocols and What They Mean for You

• FAQs

The world is rapidly embracing electric vehicles (EVs), and with this shift comes a new set of challenges for global shipping. The increase in EV transport on ships has brought a significant and unique EV fire risk that is fundamentally changing the way cargo insurers and shipping companies operate.

This blog explores the nature of EV battery fires and the new safety protocols being implemented to mitigate this growing risk in the marine insurance industry.

The Unique Risk of EV Battery Fires

Unlike traditional vehicles, an EV fire often begins with an event called thermal runaway. Electric vehicle (EV) fires frequently begin with a phenomenon known as thermal runaway, which is a chain reaction that occurs with a single malfunctioning battery cell becomes damaged. The damaged cell generates excessive heat, which triggers additional battery cells to overheat and catch fire. 

Battery fires are particularly challenging to extinguish because they can sustain themselves and reignite days later even after being doused with water. Also, EV battery fires produce highly toxic and flammable gases that can be injurious to both the vessel crew and the vessel. 

Why Marine Insurers Are Concerned

For marine insurance, the core concern is not just the fire itself but its catastrophic potential. A single thermal runaway event can quickly spread to other vehicles and cargo, leading to a complete loss of the ship. The financial risk is enormous, as a single car carrier can hold thousands of electric vehicles worth hundreds of millions of dollars.

As the incidents of fires on vessels have increased, cargo insurers are assessing the risk more closely, and some have reacted by raising premiums or even refusing to insure certain EV transport shipments without the implementation of strict, new safety procedures.

New Safety Procedures: What It Means for Your Marine Insurance

The marine insurance industry is taking proactive steps to limit the risks associated with the safe transport of EVs. These new safety protocols are essential for protecting both the vessel and your high-value shipments.

New Safety Procedure	Description	Why It Matters for Marine Insurance
Specialized Stowage	EVs are loaded in dedicated, well-ventilated areas with greater distance between units.	Reduces the risk of a battery fire spreading to other cargo, which helps lower the overall risk for cargo insurers.
State of Charge (SOC)	EV batteries are shipped at a low SOC (e.g., 20-50%) as recommended by the IMO.	Minimizes the chance of thermal runaway and subsequent EV fires, making the shipment more insurable.
Advanced Fire Systems	Modern vessels use state-of-the-art systems like high-pressure water mist.	These systems are better at suppressing EV battery fires, helping to prevent a catastrophic total loss of the high-value shipments.

FAQ's

What is thermal runaway in an EV battery?

It is a self-sustaining chain reaction wherein a damaged battery cell heats up, thus triggering the fire in the battery, which is tough to extinguish.

Does my cargo insurance policy cover EV fire risk?

The cargo insurance may cover such risk, but given the atypical nature of such fire risk, numerous cargo insurers at present would require compliance with stringent safety protocols, while the premiums, if any, would be on the higher side.

More frequent EV fires or fires in gasoline cars?

No, the studies emphasize that EV fires are a lot less frequent than fires in gasoline vehicles, but transportation poses the greater risk to EV fires due to their extremely high intensity and difficulty in being extinguished.

How do new regulations protect my cargo?

Because of the regulations, cargo will be stowed in a safer manner, charge of batteries will be more strictly managed, and battery spaces will be equipped with better fire-fighting facilities; all of these factors contribute to vastly reducing the risk of a total loss.

Who is developing these new safety rules?

Global maritime organizations like IMO are cooperating with the marine insurance bodies of importance to bring together new safety guidelines and regulations for the transport of EVs.