As the use of lithium-ion batteries expands across manufacturing, logistics, data centers, and energy storage projects, facilities face both opportunity and risk. FM Global, a leader in property risk management, emphasizes a structured, data-driven approach to protect people, property, and operations from lithium-ion battery incidents. This article stitches together practical guidance, design considerations, and operational practices that help facility owners and risk professionals navigate the complex landscape of safety, resilience, and cost control surrounding lithium-ion technology.

Understanding lithium-ion battery risks in industrial settings

Lithium-ion batteries are capable of delivering high energy density in a compact form, which makes them attractive for forklifts, pallet jacks, uninterruptible power supplies (UPS), energy storage systems (ESS), and electric vehicles used on-site. However, their chemistry also presents unique hazards that require specialized risk thinking:

• Thermal runaway: A non-linear chain reaction that can escalate from a single cell to an entire module or pack, releasing heat, gases, and potentially fire or explosion.
• Fire growth and smoke: Lithium fires can produce highly toxic and corrosive gases. Suppression challenges arise because standard extinguishing agents may be less effective once a thermal runaway is underway.
• Propagation risk: Mechanical damage, improper charging, short circuits, or external heat sources can trigger cascading failures across neighboring cells or modules.
• Ventilation and localization: Battery rooms require careful ventilation design to manage heat and gas buildup without introducing ignition sources or compromising fire control measures.
• Operational complexity: Monitoring battery health, state-of-charge, and environmental conditions is essential; a faulty BMS or degraded cooling can precipitate incidents.

From an FM Global risk-management lens, these hazards are not isolated events but a system of interdependent factors. Effective risk reduction blends design, operation, maintenance, and preparedness. This means that prevention is built into every phase of a project—from site selection and room layout to daily routines and emergency response.

FM Global’s risk-based approach to lithium-ion safety

FM Global advocates a holistic, layered protection strategy that aligns with the specific risk profile of a facility. Key elements include:

1. Hazard assessment and scenario planning: Identify how and where lithium-ion assets are deployed, how they’re charged, and where failures are most likely to propagate. Use this insight to tailor protective measures rather than applying a one-size-fits-all solution.
2. Containment and compartmentation: Separate high-density battery areas from occupied spaces and critical operations. Physical barriers, rated enclosures, and robust door assemblies help limit the spread of heat and smoke.
3. Ventilation and environmental control: Design ventilation to manage heat and gas while avoiding inadvertent delivery of fresh air that could feed combustion. Temperature monitoring and control are essential to minimize thermal stress on cells.
4. Detection and alarm integration: Early detection of anomalies—temperature rise, gas emissions, or moisture ingress—enables rapid response. Integrated alarms should tie into an emergency operations plan and on-site shutoffs.
5. Fire suppression and extinguishment strategy: Select suppression strategies compatible with lithium-ion technology and the facility’s layout. This often involves a combination of detection, accessibility safeguards, and suppression approaches appropriate to the hazard class and occupancy.
6. Emergency response and resilience planning: Train staff, coordinate with local fire services, and rehearse shutdown and evacuation procedures. The response plan should reflect the specific pathways a battery incident may take within the building.

Importantly, FM Global emphasizes data-driven decisions. By analyzing incident data, thermal runaway scenarios, and real-world outcomes from across industries, risk professionals can prioritize interventions with the greatest potential to reduce losses and downtime.

Design and zoning: architecture that reduces risk

The physical design of a facility can dramatically influence the risk profile of lithium-ion deployments. Consider these design strategies:

• Dedicated battery rooms with controlled access, dedicated electrical supply, and independent ventilation paths separate from high-occupancy zones.
• Room separation and air barriers—fire-rated walls and doors (as appropriate by code and risk assessment) to slow heat transfer and contain potential fires.
• Separation distance and placement of battery racks away from egress routes, critical equipment, and potential ignition sources.
• Modular construction that allows for controlled expansion, easier retrofits, and easier isolation of affected sections in case of an incident.
• Cable management and oxidation protection to minimize short circuits and thermal load from wiring, especially in densely packed systems.

When retrofitting existing facilities, FM Global recommends re-evaluating the layout with a focus on separation, updated detection capabilities, and the potential for modular bolting-on protection. A careful assessment helps avoid costly later modifications and accelerates safe operation.

Fire protection and detection: what works for lithium-ion systems

Fire protection for lithium-ion systems is a nuanced topic. Traditional water-based suppression may be insufficient in some scenarios, while air- or gas-based strategies alone may not be enough if a thermal event is already underway. A layered approach often yields the best overall protection:

• Early detection: Heat, gas, and smoke sensors deployed at strategic points help identify abnormal conditions before a full-scale event develops.
• Containment first: Quick isolation of affected rooms or battery banks reduces the risk of fire spreading to adjacent spaces or to occupants.
• Suppression tailored to the hazard: Depending on the system, suppression may include water mist, clean agents, or inert gas in combination with passive fire protection measures. The choice should consider personnel safety, potential collateral damage to sensitive equipment, and the risk of re-ignition.
• Ventilation control during an incident: The ability to manage airflow during a response helps prevent the migration of heat and combustion byproducts to occupied areas.

Additionally, robust maintenance of detection and suppression equipment is essential. Regular testing, calibration, and replacement of components maintain system effectiveness and reduce false alarms, which is critical in maintaining trust and rapid response during a real event.

Operations, maintenance, and battery management system best practices

Operational discipline is the ongoing backbone of safety for lithium-ion deployments. The following practices help minimize risk and extend asset life:

• Battery management systems (BMS) reliability: A well-designed BMS monitors cell voltages, temperatures, currents, and state-of-charge. Regular software updates, hardware checks, and redundancy for critical sensors improve resilience.
• Thermal management: Adequate cooling or heating control prevents thermal stress. Overheating is a leading indicator of potential degradation and risk to safety.
• Charging protocols and inventory control: Strict adherence to manufacturer-recommended charging regimes, scheduled charging during off-peak hours if feasible, and preventing unofficial or mixed chemistries within the same area reduces risk.
• Cell and module quality assurance: Incoming inspections, lot traceability, and end-of-life or degraded cell management minimize the chance of defective units triggering incidents.
• Regular inspection and test routines: Visual checks for swelling, corrosion, leaks, and physical damage; thermal imaging to identify hotspots; and functional testing of alarms and interlocks.
• Waste and end-of-life handling: Safe disposal, recycling, and handling procedures for damaged or retired batteries mitigate environmental and safety hazards.

As part of risk-transfer planning, facilities should document maintenance cycles, supplier data, and incident histograms. This information informs insurance underwriters, reduces downtime, and supports continuous improvement in safety performance.

Training, readiness, and incident response

People are a critical line of defense. FM Global emphasizes training that goes beyond compliance to build muscle memory for real events. A robust program includes:

• Role-based training for operators, security, facility managers, and emergency responders, tailored to the specific lithium-ion deployment in the site.
• Drills and tabletop exercises to practice detection, shutdown, isolation, evacuation, and coordination with local fire services.
• Clear emergency communication protocols that define alarm annunciation, incident command, and decision rights during a crisis.
• Post-incident analysis to identify gaps, update procedures, and reinforce lessons learned.

Incident response planning should be a living document. It must reflect changes in battery chemistries, system configurations, and occupancy patterns. The objective is not only to respond effectively but to reduce the probability and severity of future events through continuous learning.

Insurance considerations, documentation, and governance

From the insurance and risk-management perspective, well-prepared documentation paired with a proactive safety program translates into favorable terms and reduced total cost of risk. Key governance practices include:

• Asset inventories and location maps with precise labeling of lithium-ion assets, charging stations, and control systems.
• Maintenance logs and performance data capturing temperature trends, BMS events, and service visits.
• Risk registers and mitigation plans detailing prioritized actions, owners, and timelines.
• Proof of compliance with standards and best practices for fire protection, electrical safety, and industrial hygiene.

FM Global’s risk engineering philosophy supports a collaborative approach with insurers. Sharing risk analytics, incident histories, and resilience investments can improve confidence among underwriters and create a more accurate picture of the facility’s safety posture.

Case studies and practical scenarios

Consider a mid-sized distribution center deploying a 1.5 MWh lithium-ion energy storage system to support peak demand management. The design team engaged FM Global early in the project to anticipate risk. They implemented a dedicated battery room with-rated walls, independent ventilation, and a modular layout that allowed containment of a potential incident. Early detection sensors were calibrated to trigger at low thresholds, and a water-mist suppression system was integrated with non-combustible barriers to protect adjacent equipment. Operators received specialized training, and a quarterly drill tested both shutdown procedures and communication with the local fire department. Over a two-year period, the facility reported zero lithium-ion incidents and maintained uptime well above previous baselines, with insurance premiums reflecting the improved risk profile.

In another scenario, a manufacturing campus added forklift-mounted lithium-ion batteries for warehouse automation. The risk team identified a higher consequence area around loading docks due to vehicle movements and potential vehicle-fire exposure. They reconfigured the battery storage corridor to increase spacing, installed temporary barriers, and added enhanced heat detection near charging stations. They also refreshed their BMS integration with the central monitoring system to improve visibility into cell temperatures and state-of-charge data across fleets. The result was a measurable reduction in near-miss events and a smoother, safer operation during high-demand periods.

The road ahead: standards, innovation, and resilience

The lithium-ion landscape continues to evolve with new standards, technologies, and safety innovations. Industry bodies and regulators are advancing guidance on battery energy storage systems, charging protocols, and incident response frameworks. For risk professionals, this evolution underscores the importance of:

• Staying current with standards such as those related to electrical safety, fire protection, and energy storage system design and testing. Regular reviews ensure that facilities remain in step with best practice.
• Investing in data-centric risk management where sensor networks, analytics, and predictive maintenance inform decisions and reduce uncertainty.
• Embracing design flexibility—modular, scalable solutions that can adapt to changing workloads, occupancy patterns, and regulatory requirements.
• Prioritizing resilience by combining physical protections with operational discipline and emergency readiness, ensuring the facility can recover quickly from any incident.

FM Global remains a partner in helping organizations translate technical risk into practical, enforceable safeguards. The aim is not to eliminate risk entirely—which is impossible in most industrial contexts—but to reduce risk to tolerable levels while maximizing uptime and protecting people and assets.

Key takeaways and next steps

To operationalize the ideas in this article, consider the following steps as you plan or revise your lithium-ion battery strategy:

• Initiate a risk-led audit of all lithium-ion assets, charging stations, and energy storage deployments. Prioritize high-density areas and review separation requirements.
• Develop a layered protection plan that combines early detection, effective containment, and a tailored suppression strategy appropriate for your facility.
• Upgrade or implement a robust BMS with reliable communication to the facility’s central monitoring system. Ensure software and hardware are maintained and tested regularly.
• Design or retrofit battery rooms with rated barriers, independent ventilation, and controlled access. Plan for future expansion with modular design principles.
• Establish comprehensive training and regular drills, including coordination with external emergency responders and clear incident command protocols.
• Document all risk management actions, maintain an up-to-date asset and maintenance registry, and align with insurance requirements to optimize coverage and premiums.

Facing the lithium-ion challenge with a proactive, evidence-based approach yields tangible benefits: safer facilities, reduced downtime, better insurance positioning, and, ultimately, higher resilience for the business. By partnering with risk engineers who understand both the technology and the operational realities, organizations can unlock the benefits of lithium-ion energy storage and electric equipment while keeping people and property protected.

What to discuss next with FM Global consultants: site-specific risk scoring for lithium-ion deployments, recommended room configurations, validation of detection and suppression strategies, and a customized incident response plan tailored to your facility’s layout and occupancy.