As lithium-ion and AGM batteries increasingly become standard aboard pleasure craft, yachts and commercial boats, the conversation is changing fast.

With rising reports of thermal runaway, onboard explosions, and contamination from firefighting efforts, boat owners are starting to ask a critical question: If my battery catches fire, will my insurance actually pay out?

Let’s unpack when you’re covered, when you’re not, and how to make sure your insurer doesn’t leave you high and dry.

When Will Marine Insurance Cover a Battery Fire?

In general, if the fire is sudden, accidental, and not due to negligence, most comprehensive marine insurance policies will cover the resulting damage to the boat or equipment, reasonable costs to extinguish the fire, salvage or towing fees due to the incident and third-party liability if the fire spreads

But coverage depends on meeting key conditions, particularly for lithium-ion batteries, which are increasingly being treated as a high-risk component.

What voids a claim?

• Failure to declare battery upgrades or lithium-ion battery conversions
• Unattended charging of batteries, or charging outside of the battery manufacturer's guidelines
• Lack of specific fire safety equipment for lithium-ion battery fires, such as AVD extinguishers
• Improper installation, DIY wiring or unapproved modifications
• Neglect, like corroded terminals or unmaintained systems

“Many insurers require an AVD (Aqueous Vermiculite Dispersion) fire extinguisher to be used.” Bishop Skinner Marine (Gallagher), 2025

What About Explosions or Thermal Runaway?

When lithium-ion batteries fail, they do so violently. Known as thermal runaway, the battery goes into a chain reaction causes rapid heat buildup, off-gassing of toxic gases, and in some cases, an explosive fire. This may damage electrical systems, bulkheads or fibreglass structures, solar or charging equipment and personal belongings or electronics.

If the fire originated from the battery and the cause is not found to be owner negligence, insurers will usually cover secondary damage even if the battery itself is excluded as a consumable item. But it’s essential to document everything, from battery receipts to charging history and extinguisher compliance.

Declaring Battery Upgrades & Lithium Conversions

Many owners are now switching from lead-acid or AGM to lithium-ion systems for better energy density and weight savings. But here’s the catch: If you don’t declare the battery conversion to your insurer, your policy may be invalidated in the event of a fire.

When to tell your insurer:

• If you’ve upgraded from AGM or lead-acid to lithium-ion
• If you’ve installed additional battery banks
• If you’ve added solar, inverters, or high-output alternators
• If you’ve modified the electrical layout, including BMS or charging equipment

Insurers will often ask for battery spec sheets (make, model, chemistry), installation certificates (especially from marine electricians), proof of fire suppression provision (e.g. location of AVD extinguishers) and evidence of your charging protocols (manuals or SOPs)

Final Thoughts

Battery fires on board aren’t a hypothetical risk. They’re happening now, and lithium-ion technology demands a smarter safety approach.

To stay covered, here’s what to do:

✅ Declare any electrical or battery system changes
✅ Install AVD extinguishers and follow lithium-ion specific fire safety guidelines
✅ Avoid PFAS-based foams, and choose sustainable, compliant agents instead
✅ Keep maintenance and installation records
✅ Check policy clauses for pollution cleanup and extinguishing agent discharge

In addition to our Lith-Ex fire extinguishers, the Firechief® range of fire safety products also includes fire blankets, suppression systems, signage and products for all types of fires. For information, call us on +44 (0)330 999 0019 or email sales@firechiefglobal.com.

To stay up-to-date with more product news and insights from across the fire safety industry, follow Firechief® Global on LinkedIn.

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Disclaimer

The information contained within this blog is provided solely for general informational and educational purposes and is not intended as a substitute for professional advice. Before taking any actions based upon this information, we advise the reader to consult all relevant statutory or regulatory guidance and, where necessary, to consult a qualified fire or industry regulation professional. The use or reliance on any information contained herein is solely at the reader's risk.