Lithium-Ion Battery Fires and Builders Risk Coverage on 2026 Construction Sites

Walk any active site in 2026 and the lithium-ion batteries are everywhere and largely invisible — the cordless drill on the scaffold, the battery pack powering a compactor, the electric telehandler on charge overnight, the temporary energy-storage unit standing in for a diesel generator, the e-bike a laborer rode to work and left charging in the trailer. Each is ordinary. Collectively they represent a fire load that did not exist on a jobsite a decade ago, and the loss data has turned sharply in the wrong direction.

The clearest signal comes from New York City, where the fire department investigates and counts these events rigorously. As of the FDNY’s July 2026 update, the city had investigated 235 lithium-ion battery fires so far this year, against 138 at the same point in 2025 — an increase of more than 70 percent. Non-structural fires, the category that best captures outdoor and equipment incidents, more than doubled: 137 against 48. Citywide, one analysis put lithium-ion fire activity up roughly 41 percent. New York is not a construction statistic, but it is the most carefully measured window onto a national trend.

Why a lithium-ion fire is a different animal

A battery fire does not behave like the fires a jobsite fire plan was written for. Once a cell enters thermal runaway, the reaction is self-sustaining — it continues without external oxygen, so smothering it does little, and cooling the neighboring cells is difficult, which is why ordinary extinguisher tactics are frequently not enough. The fires can throw jet-like flames well above 1,000°C and release a toxic, flammable vapor cloud. The practical consequence is that a small ignition — an overcharged pack, a battery crushed by dropped material, a unit damaged and tossed in a skip — can escalate to a total loss before anyone brings it under control.

The causes on site are mundane, which is exactly why they recur. Batteries turn volatile when overcharged, overheated in sun or left exposed to the elements, physically damaged, or short-circuited. Tool-charging stations left running overnight have ignited; electric vehicles and equipment burn long and hot once involved; and the shift toward temporary battery energy storage systems in place of generators concentrates a large amount of energy in one location on the site. Modern materials raise the stakes further — a mass-timber or cross-laminated-timber structure changes a project’s fire profile, so a battery ignition that would have scorched a steel deck can find far more to feed on.

The coverage does not follow the risk automatically

Fire is a covered peril under essentially every builders risk policy, so contractors assume the exposure is handled. The gap is in the conditions and the valuation, not the insuring agreement.

Carriers have seen the same loss trend the fire departments have, and they are responding through underwriting rather than exclusions — for now. Property and builders risk insurers are increasingly asking how lithium-ion batteries are charged and stored on site, requiring segregated charging areas away from the structure and from fuel, UL-listed equipment and chargers, detection in storage and charging zones, and documented charging protocols. Temporary battery energy storage systems are moving into their own dedicated underwriting, with limits, siting, and protection treated as conditions of coverage rather than assumptions. A contractor who cannot answer those questions is a contractor whose renewal gets harder, more expensive, or narrower.

The discipline move

This is the part a disciplined program gets ahead of. The runway question is not whether the builders risk policy names fire as a covered peril — it does. It is whether the project value reflects today’s cost, whether delay and soft-cost coverage is in place for a fire that stops the job, whether the charging-and-storage controls the carrier now expects are actually written into the site’s fire plan, and whether any temporary energy-storage unit has been disclosed and underwritten.

Our 4-Step Strategic Process is built to surface exactly this kind of hidden exposure. Strategic Discovery inventories the battery and energy-storage load actually present across the project — tools, equipment, EVs, and any on-site storage. Risk Assessment measures that load against the builders risk conditions, the delay and soft-cost coverage, and the project valuation. Solution Design crafts the program and the site controls to close the gap with intention. Ongoing Optimization keeps the coverage and the fire plan aligned as the equipment on site changes week to week.

The torch question is a plain one. If a charging bank in the site trailer goes into thermal runaway at two in the morning, what does the policy actually do — and does the fire plan the carrier relied on match the batteries actually on the ground? Insurance here is not a line item to shop; it is a discipline to exercise. The contractor who treats the lithium-ion load as a named exposure, illuminated and controlled, is the one whose program holds when a battery that cost a few hundred dollars tries to take the project with it.

— Ryan Mefford, President & Risk Advisor