The Answer in 60 Seconds Lithium-ion batteries power almost everything a modern Singapore SME touches: power-assisted bicycles and personal mobility devices used for food and parcel delivery, e-scooters and e-bikes in workshops, cordless power tools, forklifts, electric vehicles, and the energy-storage systems behind solar and backup power. When a lithium cell fails, it fails fast. It can go into "thermal runaway", a self-sustaining chemical reaction that produces intense heat, toxic gas, and fire that water alone does not easily put out. A single charging battery left unattended overnight in a storeroom can take out the unit and the units next door.

Two separate bodies of duty land on you here, and they are not the same thing. First, fire-safety law. The Fire Safety Act 1993 makes it a strict-liability offence for an owner or occupier to cause, or fail to take reasonable steps to abate, a "specified fire hazard" at a building (Fire Safety Act 1993, s 26), and it controls how flammable materials are stored (Fire Safety Act 1993, s 78). If you sell or deal in personal mobility devices, the Active Mobility Act 2017 bans the display and sale of non-compliant devices (Active Mobility Act 2017, ss 30 and 34). Second, insurance. Property/fire, business interruption, and public or product liability cover are where the financial loss actually lands, and underwriters now treat lithium exposure as a question they ask about by name.

This article separates the two. It explains the fire-safety duties that apply to you whether or not you are insured, then walks through how the property and liability market treats lithium-battery and EV fire risk for the SMEs most exposed: delivery and logistics, retail, F&B, and workshops.

The Sourced Detail

What "thermal runaway" actually is, and why it changes the risk picture

A lithium-ion cell stores a lot of energy in a small space. When a cell is damaged, overcharged, exposed to heat, or manufactured with an internal defect, it can enter thermal runaway: the cell heats, which accelerates the reaction inside it, which produces more heat, in a loop that does not need an external oxygen source to keep going. Adjacent cells then heat and follow. The result is a fire that ignites rapidly, can reignite after it appears extinguished, and releases flammable and toxic gases.

For an SME, three features of this failure mode matter more than the chemistry. It often starts during charging, frequently overnight when no one is present. It spreads to whatever is stacked or parked nearby, so a single device becomes a building loss. And the devices involved are usually low-value items that the business never thought of as a hazard: a delivery rider's e-bike on charge in the corridor, a pile of trade-in PMDs in a back room, a forklift battery, a bank of power-tool batteries on a charging shelf.

Fire-safety duty number one: the owner/occupier obligation under the Fire Safety Act

The Fire Safety Act 1993 is administered by the Singapore Civil Defence Force and sets the baseline fire-safety obligations for buildings in Singapore. Two provisions bear directly on lithium-battery storage and charging.

Section 26 makes it a strict-liability offence for an owner or occupier of a building to cause a "specified fire hazard", or to know (or to be in a position where they ought to know) that such a hazard exists or is likely to arise and then fail to take reasonable steps to abate it. The Act is explicit that this is a strict-liability offence and that the prosecution does not have to prove the defendant intended to cause the hazard (Fire Safety Act 1993, s 26). Section 27 separately makes it an offence for any person to do, or omit to do, anything that causes a fire-safety measure not to be in working order, or that obstructs an escape route or passageway in a way that would make escape in a fire more difficult (Fire Safety Act 1993, s 27). Charging a rack of e-bikes in a corridor that doubles as the only fire-escape route engages both provisions at once.

This duty exists independently of whether you carry insurance. It is a regulatory obligation owed to the SCDF, and a breach is a criminal offence, not merely a coverage problem.

Fire-safety duty number two: fire safety works and the qualified-person regime

If you alter a building's fire-safety arrangements, for example by building a dedicated battery-charging or storage room, sprinklering it, or installing ventilation and fire separation, that work is likely to be "fire safety works" under the Act. The Fire Safety Act controls fire safety works: they generally may not be carried out without SCDF approval of plans, and they must be supervised by an appointed qualified person (Fire Safety Act 1993, Part 4). The Act also provides for registered Fire Safety Engineers for performance-based designs (Fire Safety Act 1993, Part 3A). The practical point for an SME: you cannot simply convert a storeroom into a battery room over a weekend. The works route runs through SCDF and a qualified person.

Fire-safety duty number three: storing flammable materials

Larger battery and energy-storage operations can cross into the Act's controls on petroleum and flammable materials. The storage, import, transport, and dispensing of petroleum and flammable materials are regulated, and storage above prescribed quantities requires SCDF licensing (Fire Safety Act 1993, s 78). Most small retailers and delivery firms will sit below the licensing thresholds, but a business holding significant stock of batteries, solvents, or other flammables alongside them should confirm its position rather than assume it is exempt.

The Active Mobility Act layer: if you sell, rent, or deal in PMDs and e-bikes

Singapore regulates personal mobility devices and power-assisted bicycles tightly, and part of that regime is about fire safety. The Active Mobility Act 2017 sets device criteria and prohibits non-compliant devices on public paths (Active Mobility Act 2017, s 19). For a business, the dealing provisions are the sharp end. The Act bans the display of non-compliant personal mobility devices (Active Mobility Act 2017, s 30), restricts advertising them (Active Mobility Act 2017, s 32), prohibits selling non-compliant vehicles for use on public paths (Active Mobility Act 2017, s 34), and makes it an offence to alter a compliant device so that it becomes non-compliant (Active Mobility Act 2017, s 35). Registrable devices must be registered (Active Mobility Act 2017, Part 3A). The Land Transport Authority administers the device standards under the Act, including the UL2272 fire-safety certification for e-scooters and the broader compliance criteria for motorised devices (LTA Active Mobility rules and regulations).

Two SME exposures flow from this. If you are a retailer, selling or even displaying a non-compliant device is a statutory offence in its own right. And if you supply a device that later overheats and causes injury or property damage, the question of whether it met the prescribed fire-safety standard becomes central to any product-liability claim against you.

Where the financial loss lands: the four insurance exposures

Fire-safety law tells you what you must do. It does not pay for the warehouse. Four insurance exposures sit behind a lithium-battery or EV fire.

Property and fire damage to your own assets. A fire policy or the fire/property section of a commercial package responds to physical loss or damage to your premises, stock, fit-out, and contents. A battery fire is a fire, so the peril is squarely within a standard fire policy, but the value at risk is frequently underinsured because the SME never valued the consequences of losing the whole unit to a single device.

Business interruption. If the fire stops you trading, business-interruption cover responds to lost gross profit and increased cost of working during the indemnity period. For a delivery or logistics SME, a fire that destroys a fleet of e-bikes and the depot they charge in is not a one-day event; rebuilding, re-equipping, and re-permitting can run for months. The indemnity period you select is the variable that decides whether BI carries you through.

Public liability. If your battery fire spreads to a neighbour's unit, injures a member of the public, or damages a landlord's building, third parties can claim against you. Public liability cover responds to your legal liability for third-party injury or property damage. In a shophouse or multi-tenant industrial block, the neighbour exposure is the one SMEs underestimate most.

Product liability. If you manufacture, import, assemble, modify, or sell battery-powered devices, a fire caused by a product you put into the market can generate a product-liability claim. This is the exposure that the Active Mobility Act compliance question feeds directly into: a device that did not meet the prescribed standard is harder to defend.

How underwriters treat lithium risk

Lithium-battery accumulation is now a named consideration in property and liability underwriting, not a hidden assumption. Underwriters increasingly ask, at proposal stage, whether the business stores, charges, or sells lithium batteries, in what quantity, and under what controls. The controls they look for track the fire-safety duties above: a dedicated charging area separated from escape routes and high-value stock, charging supervised or on timers rather than left overnight, manufacturer-approved chargers, damaged or swollen batteries quarantined, and storage quantities kept within sensible limits.

The practical consequences of a poor risk picture are familiar from the broader market: a lithium-storage or charging warranty written into the policy as a condition, a sub-limit applied to battery-related fire, an increased excess, a higher premium, or in some cases a requirement to improve the housekeeping before cover is offered. None of this is unique to one insurer; it is the direction the market has moved as battery fires have become more common. The General Insurance Association of Singapore is the industry body for general insurers here, and its members write the property and liability lines involved (General Insurance Association of Singapore).

The point for an SME is that the fire-safety housekeeping and the insurance terms are the same conversation. The controls SCDF expects you to maintain are the controls an underwriter prices on. Doing the first well tends to improve the second.

Common Mistakes

  1. Treating fire-safety law and insurance as the same thing. They are separate. You can be fully insured and still commit a strict-liability offence under Fire Safety Act 1993, s 26 by charging batteries in an escape route. Insurance does not discharge the regulatory duty.

  2. Assuming "it's just an e-bike" means no exposure. The device is low-value; the fire is not. A single charging battery can cause a total loss of the unit and damage to neighbours, which is a property, BI, and public-liability event at once.

  3. Charging overnight, unattended, near stock or exits. This is the single most common pattern behind serious battery fires and the one underwriters ask about first.

  4. Converting a storeroom into a battery room without going through the works route. Building dedicated charging or storage rooms is likely "fire safety works" requiring SCDF plan approval and a qualified person (Fire Safety Act 1993, Part 4). Doing it informally creates both a regulatory and a coverage problem.

  5. Selling or displaying non-compliant PMDs. For a retailer, display or sale of a non-compliant device is itself an offence under the Active Mobility Act (ss 30 and 34), independent of any fire.

  6. Buying property cover but skipping business interruption, or setting the indemnity period too short. A battery fire that destroys your fleet and depot can take months to recover from. A three-month indemnity period on a six-month recovery leaves the gap uninsured.

  7. Forgetting product liability when you assemble or modify devices. Importing, re-batterying, or modifying battery devices puts you in the product chain. A fire traced to your modification is a product-liability claim, not just a property loss.

  8. Not telling the underwriter about lithium storage. Material non-disclosure of a known fire hazard is a fast route to a disputed claim. If you store, charge, or sell batteries at scale, it belongs on the proposal form.

What This Means for Your Business

The shape of the response depends on how you touch lithium.

If you run delivery, logistics, or F&B delivery (riders charging e-bikes and PMDs): the charging setup is your primary exposure. Charge in a designated, ventilated area away from escape routes and stock, supervise or time the charging rather than leaving it overnight, use only manufacturer-approved chargers, and quarantine any swollen or damaged battery. On the insurance side, confirm your property/fire cover reflects the real replacement cost of the fleet plus premises, and that business interruption carries an indemnity period long enough to re-equip. Public liability matters because your riders and your charging area sit close to other tenants and the public.

If you are a retailer selling e-bikes, PMDs, e-scooters, or power tools: the Active Mobility Act compliance question is live for you. Stock and display only compliant, properly certified devices (Active Mobility Act 2017, ss 30 and 34). Your exposures are property/fire on the showroom and storeroom, public liability for customers and neighbours, and product liability for what you sell. If you also service or modify devices, the product-liability line widens.

If you run a workshop or use cordless tools and EVs: power-tool battery banks and EV charging are the exposures people overlook because the devices are routine. Treat the charging shelf as a fire risk, keep it away from flammables and exits, and confirm your property and liability programme contemplates the EVs and energy-storage equipment on site. If you install solar with battery storage, the larger flammable-materials and works questions under the Fire Safety Act may engage.

Across all of them: the regulatory duty under Fire Safety Act 1993, s 26 is yours regardless of cover, and the housekeeping it requires is the same housekeeping that improves your insurance terms. Document your controls. The same checklist that keeps SCDF satisfied is the one an underwriter prices on.

Questions to Ask Your Adviser

  1. Does my property/fire policy respond in full to a lithium-battery fire, or is there a battery-specific sub-limit, warranty, or condition attached to charging and storage?
  2. Have I disclosed the quantity of batteries I store, charge, or sell, and the controls I have in place, so the cover is not exposed to a non-disclosure argument?
  3. Is my business-interruption indemnity period long enough to rebuild premises, replace a fleet, and re-permit after a total loss?
  4. Does my public liability cover extend to damage I cause to neighbouring units and to injury to members of the public from a fire that starts on my premises?
  5. If I sell, import, assemble, or modify battery-powered devices, does my programme include product liability, and how does device compliance under the Active Mobility Act affect a claim?
  6. Are there housekeeping or risk-improvement conditions in my policy (designated charging area, approved chargers, quarantine of damaged batteries) that I must meet for cover to respond?
  7. If I build a dedicated charging or storage room, what fire-safety works approvals does the Fire Safety Act require, and does my insurer need to see the completed works?
  8. How does my excess and any battery-specific deductible change the economics of a smaller fire versus a total loss?

Related Information

Published 31 May 2026. Source verified 31 May 2026. COVA is an introducer under MAS Notice FAA-N02. We do not recommend insurance products. We provide factual information sourced from primary regulators and route you to a licensed IFA who can match a policy to your specific situation.