My job trailer caught fire. Inside were 40 lithium-ion batteries and chargers. The fire department put it out, but the chemical runoff from the batteries contaminated the soil. The EPA ordered a cleanup ($30,000). My insurance paid for the trailer but denied the soil cleanup, citing the “Pollutant Exclusion.”
Key Takeaways
- Batteries are Pollutants: In the eyes of an insurer (and the EPA), burning lithium-ion batteries release hazardous chemicals. Standard policies exclude liability for pollution.
- Pollutant Cleanup Coverage: You need a specific “Pollutant Cleanup and Removal” limit. Standard is often $10,000. You may need to increase this to $25k or $50k if you store many batteries.
- Thermal Runaway Risk: If the fire started from a battery (thermal runaway), insurers might investigate if you were charging them safely. If you were daisy-chaining power strips (negligence), they could fight the claim.
- Disposal Costs: Disposing of damaged lithium batteries is expensive (Hazmat fee). Ensure your “Debris Removal” limit is high enough.
The “Why” (The Trap): The Absolute Pollution Exclusion
Most General Liability and Property policies contain an “Absolute Pollution Exclusion.”
It states the insurer won’t pay for bodily injury or property damage arising out of the discharge of pollutants.
While meant for oil spills, insurers increasingly apply this to battery fires because of the heavy metals and toxic smoke involved. If your fire contaminates the client’s property or the groundwater, you are on the hook for the environmental cleanup.
The Investigation: “I Called Them”
I asked about lithium battery storage risks.
1. The Fire Claim (Property)
- Result: The batteries themselves were covered as “Tools.”
- The Catch: The disposal fee was flagged. I had to use the “Debris Removal” limit, not the Tool limit.
2. The Cleanup Claim (Liability)
- Result: Standard GL policy capped cleanup at $10,000.
- Upgrade: For $75/year, I could buy a “Broadened Pollution Liability” endorsement to cover up to $50,000.
3. Charging Safety Warranty
- Result: Some newer policies for electronics require batteries to be charged in “UL Listed” chargers and not left unattended overnight. Read the fine print!
Comparison Table: Battery Fire Costs
| Expense | Covered by Tool Floater? | Covered by GL? | Notes |
| Replacement Batteries | Yes | No | Subject to deductible |
| Burnt Trailer | Yes (Auto/Property) | No | |
| Hazmat Disposal | Limited (Debris Removal) | No | Expensive |
| Soil Remediation | No | Limited (Pollution) | Need endorsement |
Step-by-Step Action Plan
- Storage Safety: Store batteries in a metal job box or specific “Battery Bunker.” Do not leave them charging loose on a wooden bench.
- Increase Pollution Limits: If you run a fleet of cordless tools, call your agent. Ask: “What is my limit for Pollutant Cleanup?” If it’s $10k, bump it up.
- Unplug at Night: It’s a pain, but unplugging chargers at night reduces the risk of thermal runaway and strengthens your defense against negligence claims.
- Recycle Properly: Never throw damaged batteries in the trash. That is illegal and creates liability. Use Call2Recycle drop-offs.
FAQ
Q: Are the chargers covered?
A: Yes, chargers are “Tools.”
Q: What if a battery explodes in my pocket and burns me?
A: That is Workers Comp (if on the job) or Health Insurance. Tool insurance covers the property, not the person.
[IMAGE: Photo of a dedicated metal “Charging Station” cabinet with a smoke detector inside.]