March 6, 2026: The growing prevalence of lithium ion batteries means fire has now become an elevated risk to global business on land and at sea, according to a new report from Allianz Commercial.
The latest edition of the Allianz Risk Barometer, which identifies major global business risks for 2026, warns that inadequate handling, storage or transportation of Li-ion batteries has been linked to an increasing number of fires in recent years.
Released in January, the report said assessing and updating prudent fire mitigation practices, including preventive measures, fire extinguishing methods and contingency planning remain essential for all businesses to lower the risk of loss from any incident.
Allianz’s report echoes recent analysis by independent insurance broker, Lockton, which said protection and indemnity (P&I) claims hit a 10-year peak in the 2024/25 policy year — with fires and EV cargo “emerging as new flashpoints for ship owners”.
Lockton said last September that net claims reached $3.1billion, up 25% year-on-year and 16% above the five-year average.
Several members of the International Group of P&I Clubs have pointed to the rising threat of fires as an increasing driver of major losses, Lockton said. “This reflects both the risks of an ageing fleet and the growing prevalence of mis-declared or hazardous cargo, including electric vehicles.”
In the 2024/25 policy year the clubs reported a collective underwriting loss of $312 million, reversing two years of surpluses and resulting in a net underwriting loss of $98 million over the past three years.
Meanwhile, the US National Transportation Safety Board has revealed that heavy weather and an improperly secured cargo of lithium ion battery energy storage system units led to two fires aboard the 410ft-long cargo vessel MV Genius Star XI as it was transiting the North Pacific Ocean on Christmas Day 2023, causing $3.8 million in damages.
Investigators said in a report released in December they found that improperly secured lashing belts failed, allowing 41 Li-ion BESS units to shift in the cargo holds, leading to internal structural deformation. This damage caused batteries in three of the units to enter thermal runaway, causing the two fires within the holds.
Last December, BI reported that batteries were suspected of being the cause of a major fire on a cargo ship docked in the UK earlier in 2025.
The blaze broke out on the Marshall Islands-registered bulk carrier Altay on the morning of June 27, while scrap metal was being loaded into the vessel’s aft cargo hold at Albert Dock in Hull.
A preliminary assessment of the incident, published by the Maritime Accident Investigation Branch on November 27, said an undischarged battery or other ignition source likely caused a spark that ignited combustible material in the scrap cargo.
Also last year, US shipping line Matson confirmed its suspension of shipments of EVs amid rising concerns about fires sparked by lithium ion batteries.
Matson told Batteries International in July 23 it had written to customers earlier that month, effective immediately, that it had ceased accepting new bookings for shipments of EVs and plug-in hybrid vehicles.
The company, a US-owned and operated transportation services firm headquartered in Hawaii, said it would continue to support industry efforts to develop comprehensive standards and procedures to address fire risks posed by lithium batteries at sea.
Meanwhile, the Felicity Ace, which sank in the Atlantic in 2022 after a suspected EV battery fire with some 4,000 vehicles on board, still lies on the seabed – and the ship’s owner said that the vessel would likely never be recovered.
A spokesperson for Volkswagen confirmed to Batteries International that some of its vehicles were on board the vessel, but declined to give details, other than to say all crew members had been safely rescued by the Portuguese navy.
The Felicity Ace is owned by Car Carriers, a wholly-owned subsidiary of MOL Ship Management Singapore.
