Lithium-ion battery fires are reshaping waste and recycling operations as rising incidents, costly losses and tougher underwriting scrutiny expose weaknesses in site controls and insurance arrangements. Operators must now combine prevention, early detection, segregation, staff training and clear policy wording to reduce fire risk and protect long-term insurability.
Specialist Risk Group, provider of tailored insurance and risk management solutions, examines why lithium-ion battery fires are becoming a critical issue for waste and recycling businesses. With incidents, losses and scrutiny increasing, operators must now consider how prevention, site controls, underwriting discussions and policy wording work together to protect their operations.
Battery fires are no longer an occasional hazard in the waste sector. They are becoming a defining issue, reflecting how changing waste streams are reshaping both operational risk and insurance expectations. As lithium-ion batteries are increasingly used across vapes, tools, electronics and electric vehicles, operators face a risk that is not only more frequent, but far more volatile.
Recent figures show how quickly the issue is escalating. UK fire brigades attended 1,760 lithium-ion battery fires in 20251, equivalent to one every five hours and up 147% since 2022. In parallel, the Environmental Services Association (ESA) said six billion batteries were thrown away across the UK in 2024, with 1.1 billion still hidden inside discarded electrical products. The same ESA policy briefing noted that the annual cost of battery-related waste fires in the UK has surged from £150 million in 2021 to over £1 billion today, driven in large part by fires in refuse vehicles and waste facilities.
What makes this more significant is that the risk doesn’t begin when a fire starts. It begins much earlier in disposal behaviour, site intake controls, segregation processes, storage practices and, crucially, whether insurers fully understand the exposure they are being asked to cover. For many operators, this is no longer simply a health and safety issue; it’s an operational resilience, claims and insurability issue as well.
Lithium-ion battery fires don’t behave like conventional fire losses. Thermal runaway can lead to rapid escalation, difficult extinguishment, reignition risk, smoke contamination, environmental impact and extended business interruption. In practice, this means incidents can become more severe and more expensive than operators initially expect, particularly where batteries are hidden in mixed loads or damaged during handling and processing.
This is pushing battery exposure up the underwriting agenda. The question is no longer simply whether cover is available, but whether it remains sustainable and appropriately structured. The gap between being insured and being insurable on the most appropriate terms is widening.
What a stronger response looks like
A stronger response starts before material reaches site. Clear communication with customers, practical return routes and improved disposal guidance can help reduce batteries entering the waste stream in the first place.
On site, the focus needs to be on early identification, segregation and containment. That may include dedicated quarantine areas, fire-resistant containers, thermal imaging or other early-warning systems, clear escalation procedures for damaged or swollen batteries, and strict no-mixing rules for suspect loads. These controls are not simply good practice; they are increasingly part of how operators demonstrate that battery exposure is being actively managed.
Storage and processing arrangements also play a critical role. Segregated storage, smaller stockpiles, appropriate suppression systems and disciplined housekeeping can significantly influence outcomes. Given the speed at which battery fires escalate, layout and detection are as important as response.
Staff awareness is another critical factor. Teams need to be able to recognise high-risk items, understand how damaged batteries present, know when to isolate material and follow clear incident escalation procedures. In many cases, the effectiveness of battery risk management comes down to whether frontline decisions are being made early enough and consistently enough to prevent a minor issue becoming a major loss.
Why policy alignment matters
Even strong operational controls can leave uncertainty if policy wording has not kept pace with the risk. Battery exposure should be clearly reflected in underwriting discussions, disclosures and policy review. That includes considering how fires caused by hidden batteries, mixed waste streams, contaminated loads, subcontracted activities or storage arrangements would be treated in a real claim scenario.
In this environment, specialist sector knowledge can make a meaningful difference, particularly when helping operators present their controls clearly and align policy wording with real-world exposures. As underwriters ask more detailed questions about battery risk, the quality of that conversation matters more than ever.
The broader lesson for the sector is that lithium-ion battery exposure should no longer be treated as a niche or emerging issue. It’s now part of the operating reality of waste and recycling businesses, and the organisations best placed to manage it will be those that connect prevention, process, people and policy rather than treating them as separate conversations.
Every waste operation faces different battery-related exposures. If you’d like to discuss how evolving risks, underwriting expectations and policy wording could affect your business, speak to a member of our specialist waste team or visit specialistrisk.com for further insights.
Contact: Joe Southwood, Client Executive, Specialist Risk Group
Email: jsouthwood@specialistrisk.com
Tel: 07867 369860
Visit www.specialistrisk.com
1Source: ESA Policy Briefing, September 2025 –
www.esauk.org/esa-publishes-battery-fire-policy-briefing-calling-for-urgent-reform
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