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11
Aug

The Risks of EVs in Business Use

Electric vehicles (EVs) are no longer niche but an increasingly larger part of how businesses move, deliver, and operate.Whether it’s a single BYD Sealion used by a tradie or a small electric fleet for courier services, EVs offer lower running costs, tax incentives, and a more sustainable footprint. But they also raise new insurance questions—especially around lithium batteries, workplace charging, and transport risks that may not be covered by standard policies.

Why EVs Are Changing Business Risk Profiles

EVs bring unique exposures: fire risk from lithium-ion batteries, complex diagnostics and repair costs, and uncertainty around liability when damage arises from software or battery faults. While rare, EV battery fires are intense, can reignite days later, and are hard to extinguish. Business owners need to know if their motor or property policy factors in this elevated risk—especially when charging EVs onsite or storing them indoors.

Tip: Many SME motor insurance policies are still tailored for petrol or diesel vehicles. Talk to us about EV-specific policy terms and exclusions.

EV Fires in Transit: What SMEs Need to Know

In March 2024, a lithium battery fire aboard the Morning Midas cargo vessel destroyed hundreds of EVs and led to an estimated $500 million in losses. While most SMEs won’t be shipping bulk EVs overseas, this incident is a reminder: if your business is importing, relocating, or transferring an EV between sites or depots, you need the right marine or transit cover in place—especially if you’re listed as the cargo owner.

Key gaps brokers help identify:

  • Lithium battery exclusions in marine policies
  • Lack of liability clarity if transporting via third-party carrier
  • Uninsured losses when compliance with dangerous goods rules lapses

Keeping Your Insurance Up to Date

Here’s how your SME can stay protected from underinsurance:

  • Review and update sums insured to match current rebuild costs
  • Report upgrades, new equipment purchases, or renovations
  • Use a qualified valuer
  • Include debris removal and demolition costs
  • Add business interruption cover
  • Schedule annual reviews
  • Ask your broker or adviser about new risks
  • Check for grants or resilience programs
  • Keep records (photos, receipts, valuations)

EV Fires in Transit: What SMEs Need to Know

In March 2024, a lithium battery fire aboard the Morning Midas cargo vessel destroyed hundreds of EVs and led to an estimated $500 million in losses. While most SMEs won’t be shipping bulk EVs overseas, this incident is a reminder: if your business is importing, relocating, or transferring an EV between sites or depots, you need the right marine or transit cover in place—especially if you’re listed as the cargo owner.

Key gaps brokers help identify:

  • Lithium battery exclusions in marine policies
  • Lack of liability clarity if transporting via third-party carrier
  • Uninsured losses when compliance with dangerous goods rules lapses

Everyday Scenarios Where EV Cover Can Fall Short

Here’s how risks show up in day-to-day operations:

  • A solar installer uses a new EV van for customer visits, but hasn’t told their insurer they’ve switched from diesel. The result? Potential coverage issues on charging equipment stored onboard.
  • A food delivery business parks EV scooters in an underground lot. A battery fault triggers a fire damaging multiple units and adjacent property. The business discovers their policy excludes fires from lithium-powered vehicles.
  • A construction firm with mixed vehicles plugs its new EV ute into a wall socket. An overheat incident causes electrical damage and denies a claim due to improper charging setup.

Expert Support for Evolving Vehicle Risks

Don’t assume your existing motor or business property policy is EV-ready. We play a critical role in:

  • Reviewing whether lithium battery exclusions exist
  • Ensuring your policy aligns with how you actually use or move EVs
  • Clarifying cover for onboard tools, charging incidents, or battery failure
  • Keeping you updated on EV transport compliance if you operate across regions or industries

Bottom Line: EVs may be low-emission—but they’re not low-risk. Before your business invests further in electric vehicles, let us make sure your insurance is as modern as your fleet.

Article Supplied by OneAffiniti

Photo by standret

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