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FIRE RISK AS EV LITHIUM BATTERY STORAGE INCREASES Dealers are starting to store more Lithium batteries at their facilities as the numbers of exciting new electric vehicle (EV) models are driving a surge in EV sales in the U.S. However, as dealerships ramp up their EV inventory, there are several safety and liability risks to be aware of. As lithium-ion batteries become used more frequently, there are early signs showing concerns for auto dealerships due to catastrophic fires from storage and usage. Below are some tips for installation, storage, and fire suppression systems: Storage: what steps can be taken to reduce the risk of a fire? If you store batteries on-premises, develop an inspection and quality assurance process for identifying and removing any damaged lithium-ion batteries as well as for storing them safely. Training employees on how to safely handle and move batteries should also be included as part of a comprehensive storage program. Poor internal controls of battery handling and storage can lead to fires. Over-charging, excessive external temperatures, and physical exterior damage can lead to a thermal runaway condition, a further increase in temperature, often leading to a destructive result. Where possible the storage of batteries should be located away from your critical operations/building and to lower value buildings. Additionally, maintaining space between battery storage areas can increase the chance of containing the fire to a singular area. The most effective way to reduce the risk of a lithium-ion battery fire is to only store and use high quality batteries with proven designs. As the demand for these batteries has increased, so have the number of unproven designers, manufacturers, and suppliers. Installation of charging stations: Work with the right contractors with a proven track record of solid installation of systems. Have your contracts reviewed by outside legal counsel to ensure risk transfer is solid, especially items like indemnification Until controlled fire tests are performed and adopted by The National Fire Protection Association (NFPA), you should check with your local Fire Department. Although test data is not publicly available, there is promise in several alternative measures, including water mist with chemical additives as well as Aqueous Vermiculite Dispersion (AVD), a newly patented technology. Lastly, any dealership or business that stores or uses lithium-ion batteries should communicate and work with their local authority having jurisdiction or fire department to ensure the exposure to lithium-ion batteries is understood, and partner with them to develop a fire response plan. To make sure you have the right coverage, please contact Michael W. Conway, Executive Director, GNYADA Insurance Brokerage at 718-767-8100 or mconway@gnyada.com. and adequate limits of insurance. Fire Suppression Techniques

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GNYADA thanks Bill Passarotti, SVP, HUB International GNYADA Business Development Lead for the contents of this article.