NM Insurance on boats and battery risks

NM Insurance on boats and battery risks | Insurance Business Australia

Marine

NM Insurance on boats and battery risks

Insurer’s push to educate customers

Globally, the number of marine vessels running on batteries is rapidly increasing. According to some estimates, the world’s electric boat market is expected to rise from about US$5 billion a couple of years ago, to more than US$16 billion by the early 2030s.

The drivers of this three-fold increase, according to Allied Market Research, include environmental concerns, rising fuel costs and new regulations.

As those numbers rise, NM Insurance is educating boat owners about how to safely use the lithium-ion batteries that can run their marine craft and also the tools and toys onboard.

Calling for better management of batteries on boats

“We do find that the management of those batteries, or sometimes the lack thereof, has been the cause of concern on our side,” said CEO Lyndon Turner (pictured above).

Much like in the electric vehicle (EV) industry, some concerns about the fire risks of lithium-ion batteries powering boats have surfaced. However, many industry stakeholders agree that these risks are probably lower than those of vehicles and boats with combustion engines.

“The key things – and we’ve done a fairly broad article which is publicly available – are really a lot to do with the management of the batteries when they’re on charge or not on charge, but also when they’re in use and how to make sure that they’re well maintained,” he said. “There’s also the need to make sure the charger is appropriate for the battery, which links back to the manufacturer.”

According to the NM Insurance article, the most common type of battery used in the marine industry is lithium iron phosphate [LFP] batteries. According to the CSIRO’s battery expert, Dr Adam Best, these have a better safety track record than other types of lithium-ion batteries

“While some other metals such as nickel and cobalt can be quite catalytic at high states of charge, LFP batteries are more stable across a wider range of states of charge,” said Best. “That stability and the cost factors are why a lot of people use LFP batteries.”

How are batteries used on pleasurecraft?

Turner said pleasurecraft use these batteries in a variety of ways.

“That’s twofold,” he said. “Firstly, many newly constructed pleasure craft are now using lithium as bank batteries or house batteries.”

The CEO said a small number of boat owners are going to the trouble of retro fitting lithium batteries.

However, most batteries currently used by boat enthusiasts – and so most of the industry’s battery related insurance risks – tend to involve the tools and marine craft on-board the boat, rather than the power source of the vessel itself.

“Certainly, the highest volume of usage is the portable lithium batteries that are used for some tools on board like drills – but also for water toys, which could include flight boards,” said Tuner. “So we find it’s just as important to manage the portable batteries as it is the bank or house batteries.”

ACCC’s safety guide for lithium-ion batteries

Lithium-ion batteries are already ubiquitous in mobile phones, laptops, e-scooters, e-bikes and power tools.

The ACCC’s safety tips include:

Monitor charging times of lithium-ion products and disconnect products from chargers once they are fully charged.
Keep lithium-ion batteries out of household garbage or recycling bins.
Charge lithium-ion batteries and products away from combustible materials such as beds, sofas or carpet.
Store batteries and lithium-ion products in cool, dry places and out of direct sunlight, including while charging.
Do not use batteries, products or chargers that are overheating or showing signs of failure.
Check the charger you are using is suitable for the product being charged.
Allow time for batteries to cool after use and before charging.

For the full list and more battery safe handling tips refer to the ACCC’s media release and report.

Are you an insurance professional with clients in industries or sectors that use lithium-ion batteries? How are you managing this risk? Please tell us below

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