Lithium batteries have become one of the most talked-about topics in marine insurance circles, and for good reason. Whether you've recently installed a battery bank, brought an e-foil aboard, or simply started charging an e-bike on deck, you're contributing to a trend that boatbuilders welcome and underwriters are watching with growing unease.
The local numbers are already drawing attention. New Zealand has recorded a 17 percent jump in lithium-related fire claims over the past 12 months, with around 2 percent of those incidents occurring on boats. That fraction might sound modest, but fires at sea carry a severity that land-based incidents rarely match. They escalate quickly, they're difficult to contain, and the consequences for crew and vessel alike can be catastrophic.
The global picture sharpens the stakes. Fires and explosions represent the most expensive category of marine insurance claims by value, accounting for 18 percent of total payouts. That figure sits at the core of how battery systems are reshaping what underwriters ask, what policies cover, and what Kiwi boat owners can expect to pay.
*Why lithium fires are a different kind of problem*
A conventional fire gives responders something to work with. Lithium-ion fires are another matter entirely. Once a cell enters thermal runaway, temperatures can exceed 900°C within seconds. Extinguishing the blaze is extraordinarily difficult, and even when a fire appears to be out, cells can reignite hours later without warning.
The secondary hazards compound the risk. Burning lithium batteries release toxic gases that travel rapidly through a vessel's interior. The damage rarely stays confined to the ignition point, with neighbouring boats and marina infrastructure frequently caught up in the same incident, inflating claim sizes well beyond the initial loss.
Perhaps the least-recognised risk is the one that comes aboard quietly. Marine-grade battery systems are typically built with protective circuitry and established safety standards. Personal devices, such as e-boards, dive scooters, and budget lithium packs purchased online, often carry none of those safeguards and can bypass the safety checks that built-in systems rely on.
*How the insurance landscape is shifting*
Several clear patterns are emerging across the industry, each with direct implications for boat owners.
Underwriters are beginning to require detailed surveys of onboard battery systems before cover is confirmed. That means documentation of charging setups, storage arrangements, and safety protocols, not just a declaration that lithium batteries are present.
Policies are also arriving with conditions attached more and more frequently. Known as subjectivities, these are requirements that must be met for cover to remain valid. Installing fire suppression systems or restricting charging to times when the vessel is attended are among the conditions owners are encountering.
Exclusions are becoming more common too. Certain battery chemistries, older lithium installations, and high-risk storage practices are appearing on exclusion lists. Owners who cannot demonstrate responsible handling face the prospect of premium increases or, in some cases, reduced cover altogether.
*Six practical steps*
NMI Insurance recommends six measures that address both the safety risk and the insurance implications.
Choosing Lithium Iron Phosphate (LFP) batteries over NMC or cobalt-based alternatives is the first. LFP chemistry is considerably more stable and carries a lower risk of thermal runaway.
Supervision during charging is non-negotiable. Leaving lithium devices to charge unattended, particularly overnight, is one of the most common precursors to onboard fires.
Knowing the warning signs matters. Swelling, unusual odours, heat build-up, or strange noises from a battery are all signals to disconnect immediately and keep the device away from the vessel.
Using the original manufacturer's charger, rather than a cheap aftermarket substitute, removes one of the most frequent points of failure. Aftermarket chargers often lack the safety shut-offs that prevent overcharging.
Storing portable lithium batteries off the vessel when they are not in use, ideally somewhere cool and dry, reduces the risk significantly. A battery that isn't aboard cannot start a fire aboard.
If a lithium fire does break out, evacuating and calling for help is the correct response. Marine extinguishers are not effective against thermal runaway, and attempting to fight the blaze puts lives at unnecessary risk.
*Getting ahead of this*
Owners who can show that their battery systems are professionally installed, well-maintained, and managed responsibly are in a much stronger position when it comes to negotiating cover. Favourable terms and lower premiums follow demonstrated safety, not assumptions about it.
Lithium fires on New Zealand boats remain relatively uncommon, but the severity of what can happen when they occur is precisely why insurers are moving now rather than later. With fires and explosions already driving 18 percent of marine claim value globally, battery systems are changing boat insurance, and every Kiwi boatie stands to benefit from understanding why.
