Author: admin

The rising threat of battery fires is impacting insurance for recycling and waste companies

By Jason Maslin & Kenn Kunze

Battery fires quickly are becoming one of the biggest challenges in the recycling and waste industries. Whether a lithium-ion battery from an electric vehicle or a tiny button battery tucked into a greeting card, these seemingly harmless objects are causing serious safety concerns. And they’re not just sparking fires, they’re also driving up insurance premiums and changing how recyclers and waste management companies manage risk.

In this article, we’ll explore how battery fires happen, why they’ve become such a growing issue and how businesses can protect themselves while working with their insurers to avoid surprises.

A growing problem

Lithium-ion batteries are everywhere. Seriously—stop and think about how many you’re carrying right now. Most people probably have six to 10. These include a smartphone, smartwatch, wireless earbuds, fitness tracker and maybe a backup charger. These batteries are incredible because they last a long time and power many of our favorite devices.

But here’s the catch: When they end up at a recycling facility or in the waste stream, things can go very wrong. If not handled properly, lithium-ion batteries can become serious ignition sources. Recycling facilities are full of flammable materials, so once a fire starts, it can spread quickly. What could’ve been a minor spark can rapidly turn into a raging fire that puts employees and entire communities at risk.

A unique danger

All batteries store energy, which means there’s always some potential for heat or sparks. Lithium-ion batteries pose a unique danger because of something called thermal runaway.

When a battery is damaged, whether from being crushed, punctured or overheated, it can enter thermal runaway. This means the battery gets so hot that it starts generating its own heat in a self-reinforcing cycle. The heat builds until the battery leaks, swells, catches fire or even explodes. And once that process starts, it’s hard to stop.

Unfortunately, the conditions at many recycling and waste facilities can trigger thermal runaway.

Even small batteries can be a problem. Take button batteries, for example. These tiny, seemingly innocent batteries are easy to miss during sorting. If they’re punctured or damaged, they can ignite nearby materials. The scary part is that we all have these types of batteries in our homes—think car key fobs, remote controls, toys and even birthday cards that sing.

When it comes to storing and disposing of batteries properly, consumers could consider keeping spare batteries in a dedicated plastic container to avoid tossing them into a junk drawer with paper, matches or other flammable items. Used batteries can be protected during disposal by taping the contacts and delivering them to a battery recycler rather than placing them in the waste can or blue bin.

The insurance angle

Companies in the recycling or waste business probably have noticed insurance premiums going up. Fires caused by batteries have become so common that insurers are adjusting their rates across the board—even for companies with clean records.

Typically, waste businesses are seeing 15 percent to 20 percent premium increases. But for companies that have had claims in the past, those increases can be as high as 50 percent or more.

When considering an insurance company, underwriters look at a facility’s operations and claims history. They focus on two key things: frequency, or how often the company has had incidents; and severity, or how serious and costly those incidents were.

Battery fires have been ticking both boxes. These fires can destroy buildings, equipment, vehicles and inventory. Business interruption claims add even more to the cost.

Our client base has seen several high-dollar claims caused by small batteries that slipped through unnoticed. Insurers understandably are nervous and have begun passing that increased risk on to their policyholders.

Another trend we’re seeing is tighter policy restrictions. Some insurers are adding warranties or exclusions related to fire coverage. For example, a policy might require the company to have active fire, smoke and carbon monoxide alarms monitored by a central station.

Some policies won’t cover battery fires unless a sprinkler system is installed. Others are outright excluding certain types of fires caused by batteries.

The bottom line? Read insurance policies carefully. Know what’s required to maintain coverage and what exclusions might apply.

Proactive steps to reduce risk

The good news is that companies can take many steps to manage risk and reduce the chance of a fire.

1. Create a comprehensive fire management plan.

A fire prevention plan is required by the U.S. Occupational Safety and Health Administration and will be reviewed by an underwriter. However, the best reason to have a plan is to guide training and audits to reduce fire risk. Think of it like a playbook. The fire prevention plan is your “offense” when you’re in control and winning the game.

An emergency action plan also is required. Think of that as your “defense.” If you fumble, you need to get back on offense as soon as possible with little loss. Audits, meanwhile, are your “scoreboard.” Companies should assess regularly to see if they’re meeting the goals outlined in their fire management plans.

2. Focus on key areas.

Inbound source control: A company’s first line of defense is keeping batteries and other risks out of the facility in the first place. Educate customers and the public about what shouldn’t end up in the recycling stream.

Pile management: Big fires need big piles of fuel. Set limits on pile sizes, including pile height and perimeter. Keep them separate from ignition sources and valuable property. Have a plan for handling incoming material whenever processing equipment is down.

Hot work program: Activities like welding, cutting and grinding cause about 20 percent of fires in the recycling industry. A hot work permit program will help control these risks. Keep all documentation on file for one year.

Detection and protection systems: Fire alarms, sprinklers and other systems are essential. Make sure they’re regularly inspected, tested and maintained to ensure an effective response when required.

3. Get everyone involved.

Your team is your greatest asset, and employee engagement is essential. Employees are on the front lines, so make sure they’re trained and understand their role in fire prevention.

Education is a key component in reaching zero waste goals, yet many communities struggle without the help of a digital tool. Traditional methods can only communicate so much, are tough to keep updated, and create barriers for residents looking for the information they need.

The local fire department should be part of a fire prevention plan as well. Invite firefighters to tour the facility and learn about the risks and resources available, building that relationship before an emergency happens.

Consult the experts at organizations like the Recycled Materials Association and IC Fire Prevention LLC, which offer resources and assessments to help companies reduce risks.

When it’s time to renew insurance policies, make a strong first impression. Once an underwriter declines an application, it’s hard to change their mind.

Applicants should write a detailed executive summary that explains how the business operates, what equipment is used, safety practices and risk management strategies and claims history and what the company has done to improve.

Insurers appreciate it when companies are proactive and transparent. Some even offer risk management tools to help companies improve safety.

Safety committees

We also recommend forming a safety committee to keep risk management efforts on track. The most effective safety committees meet regularly, adjusting the agenda as needed to focus on high-frequency and high-risk concerns first. Committees should involve people from every department—encourage participation by entertaining all ideas and prioritizing them by relevance rather than ridiculing any individual idea.

Lithium-ion batteries—and battery fires in general—are forcing the recycling and waste industries to rethink how they manage risk. Insurers are watching closely, focusing on the increased frequency and severity of these fires. Companies without solid fire management plans are seeing skyrocketing rates, policy exclusions and stricter requirements.

But there’s hope. Emerging technologies are making it easier to detect fires early, and battery manufacturers are working on safer designs. For now, the best way forward is to be proactive. Develop a strong fire prevention plan, work closely with insurers and engage with employees, experts and the local fire department. Taking these steps will help protect your people, your property and your business.

Jason Maslin is an insurance counselor and vice president at Bradley & Parker, Melville, New York, focusing on commercial, group and personal insurance for high-net-worth companies and individuals. Kenn Kunze of IC Fire Prevention LLC is a retired battalion chief with the Fort Wayne, Indiana, fire department. Learn more at www.icfireprevention.com.

One of the keys to running a successful business is having in place a robust risk management system to ensure your company can guard against a growing number of threats that can derail operations or cause significant losses.

While each industry and company have different risks they face, a recent survey collected responses from risk managers around the world to identify the top risks facing Long Island businesses.

The “Allianz Risk Barometer 2025” highlights the key threats for organizations in an increasingly interconnected and volatile environment.
Below are the top eight risks in 2025 and what you can do to protect against them.

1. Cyber incidents
Cyber risks like ransomware attacks, data breaches and IT outages remain the number one threat globally. With AI accelerating the sophistication of attacks, businesses have to double down on protection.

What you can do — Invest in robust cyber-security measures and training employees on how to detect threats and avoid clicking on links that contain malicious code. Regularly update systems, conduct penetration testing and educate staff on cyber hygiene.

2. Business interruption
Supply chain disruptions, often triggered by cyberattacks or natural disasters, have consistently ranked high. If one of your suppliers suddenly can’t provide you with goods your firm needs or a cyber attack affects your ability to function, you will lose money.

What you can do — Diversify suppliers, explore local sourcing and implement business continuity plans that include how to respond to each possible issue that could result in disruption to operations or sales.

3.Natural catastrophes
Events like hurricanes, wildfires, convective storms and flooding can cause significant losses, be that from damage to property and assets, injury to staff, employees being unable to work or business interruption.

What you can do — Put in place a disaster recovery plan that includes how members of your staff will communicate, possible alternative locations for operations, and how to protect your facilities. Evaluate disaster preparedness and explore insurance solutions.

4. Changes in laws, regulations
Regulatory shifts, especially around sustainability and emerging technologies like AI, are creating compliance challenges. Businesses will be faced with plenty of uncertainty under a new Trump presidency, considering his plans to pursue deregulation.

While a boon for business, it could lead to confusion, particularly for those who operate in blue states. Also, the new president’s promises of raising tariffs could lead to higher costs for many businesses that source products, parts and machinery from abroad.

What you can do — It’s important that you stay on top of regulatory and legal changes to avoid penalties or lawsuits. Engage legal advisors or compliance experts to navigate changing laws.

5. Climate change
The physical and operational impacts of climate change, such as extreme weather and resource scarcity, are intensifying and businesses need to harden their operations to cope.

According to the report: “Extreme temperatures can drive up energy demand, which is especially critical for industries reliant on cooling systems, potentially leading to operational cost increases. Water scarcity can threaten businesses reliant on water for operations, while biodiversity loss undermines ecosystem services which many industries depend on, for example, agriculture or maintaining crop yields.”

What you can do — Many of the same preparations businesses can make for dealing with natural catastrophes can also be used for climate change resilience.

6. Fire and explosion
Fires remain a leading cause of business interruption, especially with the rise of lithium-ion battery incidents. “The degree of disruption can be very high, as it can take longer to recover from many other perils,” the report states.

What you can do — Ensure that you conduct regular fire safety audits and training to staff, particularly if you store flammable materials on-site. Regularly update your fire prevention protocols and provide emergency response training.

7. Macroeconomic developments
Economic uncertainties, including inflation and fluctuating monetary policies, pose challenges for budgeting and forecasting. This will be especially true under the Trump administration as he sets out to reverse Biden’s policies and pursues tariffs that could lead to trade wars.

What you can do — Keep abreast of market trends and adapt to macroeconomic changes with flexible planning. Staying agile and diversifying revenue streams can mitigate risks.

8. Market developments
Many experts believe it is unlikely that there will be a major stock market correction in 2025. Recovering earnings and Trump’s plans for deregulation and strong fundamentals should support continued growth.

What you can do — Strategic planning and market analysis are critical if your organization is reliant on stock market gains.

The takeaway
The above list of risks was gleaned from a survey of companies around the world, but many of the risks also apply to U.S. firms.
It’s important that businesses take a structured approach to managing their risks and creating plans for all eventualities that may affect them. That requires buy-in from management and a focus on protecting the company’s revenue stream, physical and digital assets, employees and supply chains.

If you have outdoor workers or staff that will have to venture out into the elements during an especially cold winter, you need to make sure you are taking the correct precautions to keep them safe.

If the conditions are extremely harsh, your workers are at heightened danger of injury, or worse. But even if you have employees who are outside for short periods, they can also suffer injuries if they are not prepared.

The many dangers of winter
Winter can bring with it several dangers to your outdoor workers:

• Cold or frigid temperatures
• High winds
• Damp air
• Slippery surfaces
• Contact with water
• Frostbite
• Hypothermia
• Risk of strains, slips and falls
• Dehydration
• Decreased performance

OSHA has the following recommendations for protecting your workers:

Check the forecast — A supervisor should check the forecast for the next day before the end of the shift the day prior, to alert workers about any precautions they should take.

Appropriate clothing — Workers should have proper clothing suited for working in cold-weather conditions. Clothing from thermal underwear to gloves and jackets are the first line of defense against cold weather. Consider these tips for your employees:

• Wear three layers of clothing. Start with insulating underwear — which traps perspiration — a middle layer that protects the body from precipitation, and an outer layer that allows ventilation and prevents overheating.
• Cotton is not always a good choice. Wool, silk and some synthetic fabrics are better at keeping skin dry even when it’s raining or the worker is sweating.
• Wear loose clothing. Tight clothing can trap moisture and lower body temperature.
• Protect your extremities. That means head, hands and feet. Wear a warm cap or hat, insulating gloves and two pairs of socks and insulated shoes.
• Carry an extra set of clothing in case something happens and a worker has to change.

Train workers — They should be trained on how to prevent and recognize cold-stress illnesses and injuries, and how to apply first aid treatment. Workers should be trained on the appropriate engineering controls, personal protective equipment and work practices to reduce the risk of cold stress.

Workers should be aware of their body signals — Teach your employees about the symptoms of frostbite, hypothermia and dehydration and report any symptoms they are experiencing to supervisors, who should know how to summon help and protect the worker.
The symptoms of hypothermia are:
Mild symptoms:

• The worker may begin to shiver and stomp their feet in order to generate heat.

Moderate to severe symptoms:

• As the body temperature continues to fall, symptoms will worsen and shivering will stop.
• The worker may lose coordination and fumble with items in the hand, and become confused and disoriented.
• They may be unable to walk or stand.
• Dilated pupils.
• Slowing pulse and breathing.
• Loss of consciousness can occur.

The symptoms of frostbite are:

• Reddened skin develops gray/white patches.
• Numbness in the affected body part.
• The affected part feels firm or hard.
• Blisters may occur in the affected part, in severe cases.

Eat healthy, stay hydrated — Employers should stress the importance of a healthy diet to help workers power through harsh weather. They should be told to regularly drink warm water or warm sweetened fluids throughout the day.

Ask that they always eat breakfast before working outside, to give the body the fuel it needs. Also ask them to avoid excessive drinking the night before work.

Workers’ compensation insurance in New York can be a large cost center for a Long Island business, and if your employees are regularly injured on the job those costs can quickly become a financial burden, even in this period of low rates.

Companies in industries with high rates of workplace injuries are especially vulnerable, particularly if an employee suffers permanently disabling injuries, or worse. But even a relatively safe business can see its premiums surge if it has a few costly claims.

Fortunately, employers can take steps to get a better handle on their workers’ compensation costs.

While the steps look easy on paper, they require management buy-in, a focus on preventing injuries and getting injured workers healed and back on the job. Here are three things that employers can do to better control their workers’ comp costs.

1. Focus on accident prevention

To reduce the possibility of workplace incidents focus on the basics of a sound safety strategy:

• Keep workspaces clean and free from clutter. Slips and falls can happen in an office, a factory or warehouse floor, a store or a construction site. Post warnings of slippery surfaces and immediately clean up spills. Ensure your floors are clear of power cords and computer cables. Don’t obstruct walkways and keep all work areas free from tripping hazards.
• Keep equipment in good condition. This is especially important on construction sites, where injuries can be particularly severe. Ladders, tools, power equipment and other materials should be maintained, in order to minimize the risk of injury.
• Provide appropriate protective equipment. This varies depending on the workplace. Workers should wear gloves and hard hats on construction sites, burn protection and slip-resistant shoes in restaurants, masks and gloves in medical offices, and so on.
• Train workers on safety. Make sure they know how to safely perform their tasks. Do this during new employee orientation and hold regular safety training or tailgate meetings. The more hazardous the work environment, the more frequent training you’ll need to provide. All workplaces where frequent injuries are occurring should also have them.
• Create a safety culture. Model safe work practices and let employees know they are expected to do likewise. Recognize and reward safe practices, but don’t discourage or retaliate against employees if they file a claim.
• Work with a trusted insurance agency on Long Island like Bradley & Parker located in Melville.  Ask your agency to suggest safe work practices and let employees know they are expected to follow these. Recognize and reward safe practices, but don’t discourage or retaliate against employees if they file a claim.

2. Limit claims costs

Ensure that the injured employee gets prompt medical attention. Be proactive and stay in contact with your worker and your carrier throughout the duration of the claim. Also, be sure to complete all required documentation in a timely manner to avoid unnecessary delays in the claims process.

Ask for second opinions on expensive surgeries or treatments. Have in place a return-to-work program to allow injured employees to work in lighter-duty roles until they are healthy enough to resume regular work.

 

3. Keep detailed employee records

Documentation is extremely important in workers’ compensation, the costs of which are based the number of employees, how much each of them are paid and what kind of work each worker performs.

You’ll need to keep detailed and accurate payroll records to back up the numbers you submit to your insurance company. If you don’t, they’ll find them through the regular audits they conduct and if you underreported, they’ll ask for additional premium.

Example: Suppose a business has 10 employees, with eight of them doing hazardous work and two of them administrative employees. Without records segregating the payroll of the clerical workers from the others, the insurer will assign the high-hazard classification to all 10 employees, forcing the business to pay more than necessary.

 

The takeaway

Workers’ compensation ensures that injured employees have a reliable and speedy source of funds to replace lost income, and that the medical expenses for their industrial injury or illness are covered.

Employers who don’t keep safe workplaces, are not engaged in their workers’ claims and keep sloppy records, end up paying more for coverage. Those that do the opposite, don’t.

Business e-mail compromise scams are now the most common type of cyber attack businesses face, and all types of these attacks are showing no signs of letting up, according to a new report. cyber liability insurance is more necessary than ever before — even to the government.

Nearly three out of every four businesses were targets of these types of attacks and 29% of those firms became victims of successful attacks, which involve criminals impersonating company insiders or vendors to convince key personnel to transfer funds to them, according to the report by Arctic Wolf, a cyber-security firm.

While this has become the most common type of attack, a number of other schemes like ransomware attacks and data breaches are also growing in number and scope of damage. Any of these attacks can drain a company’s finances and result in tricky legal and possibly reputational issues that take time and money time to resolve.

Combating these threats requires training and cyber insurance coverage that may pay for the costs related to cyber attacks.

Here are the main threats businesses are contending with, according to the report:

Business e-mail compromise (BEC) — Seventy percent of organizations surveyed said they had been targeted by these types of scams. Some examples of BEC attacks include impersonating company executives to request wire transfers, falsifying invoice payment details, and tricking employees into revealing sensitive information. These scams can result in significant financial losses for businesses.

CAUTION: For businesses that use cloud-based e-mail services like Office365, these attacks are hard to detect since they don’t reside on company servers.

With many organizations moving to cloud-based e-mail services, these types of attacks can be difficult to identify with traditional security tools and may go undetected until they have successfully executed their objectives. This is one of the reasons why it is important to have cyber liability insurance.

Data breaches — Nearly half (48%) of organizations surveyed reported that they’d found evidence of a breach in their systems. The authors said that does not mean that the other 52% didn’t suffer a breach; it means they failed to find evidence of one.

Ransomware — Some 45% of organizations surveyed admitted to being the victim of a ransomware attack within the last 12 months. These attacks usually involve criminals gaining access to a company’s systems by getting an employee to click on a malicious link, after which they lock down the system and demand a ransom to unlock it.

Increasingly, these attacks include a data-theft component and the perpetrators may demand an additional ransom not to release the sensitive data to others.

What companies can do

To combat business e-mail compromise scams, you should:

• Register all domain names that are similar to the business’s legitimate website and can be used for spoofing attacks.
• Create rules that flag and delineate e-mails received from unknown domains.
• Monitor and/or restrict the creation of new e-mail rules within the e-mail server environment.
• Enable multi-factor authentication.
• Conduct BEC drills, similar to anti-phishing exercises.

Finally, companies that use cloud-based e-mail services should when adopting Office 365 or alternatives employ detection tools or services specifically designed to monitor for threats related to business e-mail compromise scams.

To combat ransomware, you should consider:

Regularly backing up systems and data. Perform frequent backups of your system and other important files, and verify your backups regularly. This way you can restore functions if hit by ransomware.

Storing your backups separately. In particular, store backups on a separate device that cannot be accessed from a network, such as on an external hard drive.

Training your staff. Train your staff in how to spot possible phishing e-mails that are designed to convince an employee to click on a malicious link that will release the ransomware.

Cyber Liability Insurance

To ensure that your organization is protected in case of an attack, you should seriously consider purchasing cyber liability insurance. Bradley & Parker in Melville can help you with purchasing cyber insurance. Visit our commercial insurance page for more contact information.

Policies vary by carrier, but often may help pay for any financial losses you may incur in the event of a cyber attack or data breach. A policy also helps cover any costs related to the remediation process, such as paying for the investigation, crisis communication, legal services and refunds to customers.