In a move to be more environmentally friendly, Australia has seen an uptake in the sale of electric vehicles, with the Federal Chamber of Automotive Industries in Australia reporting that the number of electric vehicles sold in 2023, had increased by 161.1% from the year prior, in 2022.

With this increase in electric vehicles, and it being only a very new technology, it is crucial to understand the risk of lithium-ion batteries in electric vehicles and the impact it may have on the construction industry.

Lithium-ion batteries used in electric vehicles include an electrolyte containing lithium ions that are flammable, energetic and produce highly toxic gasses. Short circuits can occur in the cells that make up the battery causing a chemical reaction leading to overheating which can, in turn, catch fire when accompanied by the release of flammable gasses, known as a thermal runway event.  The batteries can continue to burn even while under water and because lithium reacts with water, producing a highly flammable hydrogen, it continues to burn until all the fuel is consumed. This creates a difficult situation to control and extinguish, with the primary focus being on trying to limit the ability for the fire to spread. In the context of the construction industry, it is key that the infrastructure of carparks be designed with this risk in mind – for example, designing so that, if a fire does break out from an electric vehicle, the fire can be contained to a small area.

Overcharging can be the cause of a thermal runaway event and for many projects that design consultants are working on a huge risk. Vero, a specialist provider in insurance products, has provided the following list of suggestions on how to manage battery charging risk. Many of them are very relevant to architects, engineers and other consultants who design carparks or other places where electric vehicles may be charged:

1. Locate charging to open air carparks clear of buildings.
2. Group charging facilities into small numbers with extensive space between groupings.
3. Ensure charging stations are greater than 15 m clear of combustible building construction and areas of building access to ensure building egress or provide engineered fire walls and protection for structural steel.
4. Ensure no building utilities are in the adjacent areas such as gas or electricity lines, fuel tanks or air conditioning intakes.
5. Reduce the number of charging facilities that are provided.
6. Provide impact protection around charging facilities.
7. Install the charging station to the manufacturer’s instructions and electrical regulations.
8. Ensure annual checks are completed by qualified electricians.
9. Install residual current devices (RCDs) on all charging systems to protect from ground faults.
10. Ensure isolation point for emergency shutdown of electrical supply is accessible.
11. Provide a battery off-gas detection system to automatically shut down charging systems and notify relevant parties.
12. Charging areas should be well ventilated to National Fire Protection Standard for Parking Structures (NFPA 88A).

Despite these precautions, there are still a number of other concerns for design consultants when considering electric vehicle battery charging on their projects. Existing residential building electrical systems were not generally installed with electric vehicle charging in mind and any changes to such electrical systems will need to cope with the extensive power demands of electric vehicle battery charging. Further, to ensure electric vehicle fires do not spread to surrounding vehicles and structures, a much higher volume of water is required when compared to a fire involving petrol-powered cars, which may be a further major expense for building owners and owners corporations .

Retrospective changes to building design will always be more expensive and disruptive than incorporating these measures into the initial design.

What does this all mean in with respect to your professional indemnity insurance?

We have not seen any trend for providers of professional indemnity policy for the performance of professional design services in the construction industry to specifically exclude claims relating to issues arising out of battery charging systems. However, we note that your professional services are still subject to the terms, conditions and exclusions under your specific policy. We suggest that to reduce claims associated with battery charging, you take the following actions:

• All specifications should be in accordance with any relevant Australian Standards;
• Outsource any services where needed to an expert in the relevant field (i.e fire engineer);
• Organise for appropriate testing and trials to be completed by relevant persons; and
• Document all communication between all parties involved and keep good records.

Stephanie Petreski
Risk Manager