Why lithium batteries in waste are driving serious fire losses

Lithium batteries are changing the risk profile of waste and recycling operations, creating increasingly complex insurance considerations for brokers and their clients.

In recent weeks, a series of major fires at UK waste and recycling facilities has highlighted the growing challenge posed by lithium-ion batteries entering the waste stream. Incidents in London, East Anglia and the North West have collectively resulted in tens of millions of pounds in property damage, business interruption and environmental losses, underlining how quickly a small ignition source can escalate into a major claim.

The London Fire Brigade's response to the recycling centre fire in Bermondsey, involving 15 fire engines and around 100 firefighters, is just one example of a broader trend facing operators, insurers and brokers across the sector.

At the same time, UK data shows that e-cigarette and vape-related fires are rising despite regulatory action. Freedom of Information responses obtained indicate that fire brigade callouts involving e‑cigarettes climbed from 132 incidents in 2024 to 172 in 2025 – an increase of around one third – even after the ban on disposable vapes took effect. Across all lithium-ion powered devices, fire services reportedly attended around 1,330 battery fires in 2024, almost double the 690 recorded in 2022, with average insured losses of around£50,000 per claim_1.

"Lithium batteries are now one of the most significant emerging exposures facing the waste and recycling sector. The challenge is that batteries can enter the waste stream unnoticed and, once damaged or crushed, can enter a state of thermal runaway with the potential to cause severe losses. As incidents become more frequent, insurers are placing greater emphasis on understanding the controls operators have in place to manage the risk.” – Jamie Kelly, MX

For waste and recycling operators – and the brokers placing these risks – this is no longer an emerging issue. Household and commercial waste now routinely contains discarded vapes, power tools, e‑bikes and small electronics. Many of these batteries are damaged, poorly manufactured or incorrectly stored before they reach the site. In some cases, internal defects can also lead to failures without any obvious external trigger. Once mixed into general waste, batteries may be crushed, punctured, short circuited or otherwise destabilised by handling processes, increasing the potential for thermal runaway and fire.

For brokers in the waste, recycling and reuse space, the key challenge is understanding how these technical exposures translate into insurance placements. Standard motor and property policies may not always reflect the operational realities of vehicles used as tools of trade, continuous waste handling or environmental impairment exposures. As a result, brokers often need to draw on specialist schemes and wider market expertise to build solutions that reflect the client's specific operational risks.

Operational risk hotspots: from vape disposal to refuse fleets

Lithium batteries in the waste stream present distinct operational hotspots: at point of collection, within transfer and sorting facilities, and during haulage and storage. Understanding these helps brokers ask the right questions and position clients for specialist cover and risk management support.

Collection and kerbside operations are often the first pressure point. Vapes and other battery‑powered devices are small enough to hide in household rubbish and commercial bags. When loaded into refuse vehicles, they can be compacted with high force, deforming the cell casing and causing internal short circuits. A single vape can ignite mixed recyclables, plastics and residual waste inside the body of the vehicle. These fires may be extinguished by crews before the fire service is required and therefore never appear in official statistics, but they still damage vehicles, disrupt routes and create liability exposures on the road.

Within transfer stations and material recycling facilities, batteries can slip through mechanical screening and end up in stockpiles of paper, card, plastics or residual waste. Shredders, trommels and conveyors can crush or pierce cells, leading to smouldering fires that only become visible once waste is baled or stored. The Bermondsey incident shows how quickly a fire involving stockpiled refuse can extend to building fabric, vehicles and neighbouring units, resulting in property damage, business interruption and environmental clean‑up costs.

For operators running waste to energy plants, the risk profile is even more complex. Batteries can explode under high temperatures, damaging boilers and process equipment and leading to prolonged outages. Emissions control systems can be overwhelmed by sudden combustion events, increasing regulatory scrutiny and potential breaches of environmental permits. In each case, questions about contractual responsibilities, third‑party damage, and environmental impairment liability become central to any claim.

Refuse fleets themselves represent a concentrated exposure. Vehicles are often parked closely together in depots, carrying residual waste, and may be used as tools of trade on public roads and private sites. Brokers should consider how the client manages parking arrangements, hot‑work, automatic fire suppression, camera and telematics data, and driver training around recognising early signs of a battery‑initiated fire.

As awareness grows, more local authorities, commercial customers and regulators are asking for evidence of robust risk controls and suitable insurance. Brokers that can talk confidently about lithium battery exposures, point to relevant industry incidents, and explain where standard motor and property policies may fall short can add real value – and position themselves as long‑term partners to these specialist operators.

"Five years ago, lithium batteries rarely sat at the centre of a waste placement discussion. Today, they're often one of the first areas insurers want to understand. That's because a single discarded vape or damaged battery can create exposures that extend well beyond the initial fire, affecting vehicles, property, business interruption and environmental liabilities. As incidents become more frequent, understanding how those exposures interact is becoming increasingly important." – Luke Sloan, Senior Property Broker

How specialist waste & recycling insurance can respond

As lithium battery fires become more frequent, insurers are taking different approaches to managing the exposure. Depending on the nature of the risk, this may include additional underwriting requirements, conditions or policy restrictions.

At Miles Smith, our focus is on understanding each risk individually. Working with specialist scheme partners and insurers, we seek to understand how lithium battery exposures are managed in practice and how effective risk controls can support both resilience and insurability.

This collaborative approach includes discussions around measures designed to reduce the likelihood and severity of thermal runaway incidents, such as:

• Dedicated external battery storage areas or containers
• Thermal imaging cameras and automatic fire detection systems
• Robust battery acceptance, sorting and handling procedures
• Staff training and incident response planning
• Cover for the carriage of hazardous goods
• Third-party working risk cover
• Theft cover whilst keys are in the ignition when being used as a tool of trade
• Sudden and accidental spillage, pollution and contamination cover
• Unlimited trailer cover, including at customer premises

By understanding these controls alongside the client's wider operations, we can help brokers secure insurance solutions that reflect the realities of the risk, drawing on specialist schemes and wider insurer relationships where required.

Our dedicated Waste & Recycling scheme has supported brokers and their clients for more than 15 years and is structured specifically around these realities - from complex vehicle use through to environmental and liability exposures.

Key features include:

• Cover for the carriage of hazardous goods
• Third-party working risk cover
• Theft cover whilst keys are in the ignition when being used as a tool of trade
• Sudden and accidental spillage, pollution and contamination cover
• Unlimited trailer cover, including at customer premises

Environmental impairment and business interruption exposures are also a key consideration, particularly where fire or contamination events can lead to operational downtime, regulatory involvement or clean-up costs.

When incidents occur, access to specialist claims support is critical. The scheme provides an experienced claims team familiar with the sector, alongside a 24-hour spillage response service to help manage environmental incidents quickly and effectively.

As lithium battery exposures continue to evolve, specialist placement expertise, practical risk management and sector knowledge will play an increasingly important role in helping brokers secure appropriate cover for waste and recycling clients.

₁ Zurich, Vape fires still rising, one year on from the disposables ban, 2026: https://www.zurich.co.uk/media-centre/vape-fires-still-rising