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Managing Electric Vehicles (EVs) Risks and Insurance

  • Adroit Insurance and Risk
  • July 19, 2023

Australian EV sales increased by 65% last year, 2022, and with the rapidly increasing take-up, building infrastructure to support EV recharging is becoming increasingly important. That means installing EV chargers in homes and public spaces, which has its risks.

​​​​​​​In this article, we’ll look closer at the potential risks and dangers of EV cars, chargers and insurance.

How does an EV car work?
To understand the risks, it’s important first to know what an EV car and chargers are and how they work.

Electric cars function by plugging the car into a charge point at home or in a public place and taking electricity from the grid. They store the electricity in rechargeable lithium batteries that power an electric motor, which turns the wheels.

Electrical fire and shocks
There’s no greater likelihood of an EV car fire than a petrol or diesel engine car fire. However, lithium-ion batteries can start fires and even explode if they ignite or overheat. They have an aggressive fire type that spreads rapidly, can reignite and is challenging to extinguish, an issue, especially for firefighters.

Cyber threats
There are also cyber threats associated with EV chargers. They’re vulnerable to cyber-attacks since they’re connected to the internet. Hackers could potentially access the charger’s system and take control of it, causing it to malfunction or even overcharge the battery, leading to explosions or fires.

How does an EV charger work
An EV charger is an electrical device that plugs into your EV car to recharge the battery. It draws electricity from your home or from the public grid at recharging stations installed in car parks or on the street.

Electrical fire and shocks
One of the main risks associated with EV chargers is the electrical hazard risk. The high voltage and current involved in charging an electric vehicle can be dangerous if not handled properly. A faulty charger could cause electric shocks or fires, leading to personal injury or property damage.
If the lithium-ion battery overheats or there is a fault, it can be an aggressive fire type that spreads rapidly and can reignite or explode. It’s therefore challenging for firefighters to extinguish.

Public Liability trips and falls
If an EV charger cord runs across a pedestrian area, a passer-by could trip and fall over the power cord. It’s important to have public liability insurance to cover this risk, which is usually provided by the car insurer.

Public EV charger
If someone is injured or their property is damaged due to a faulty EV charger, the owner of the charger should be responsible. This could be the charger manufacturer, the property owner where the charger is installed, or the charging network operator.

Home EV charger
If you have an EV charger installed at home or in a strata block, it should be installed and maintained by a qualified electrician. Then if a visitor is injured or your home is damaged due to a faulty EV charger, your home insurer will repair any damage to the home and pay legal defence costs and damages if you’re found to be responsible. Your insurer will then look at taking action against the EV charger manufacturer or installer.

Risk Management
To minimise these risks, EV charger manufacturers, installers, and operators need to follow strict safety protocols. This includes regular safety inspections, maintenance, user education, and ensuring that chargers are installed in safe locations. It’s also essential to have sufficient insurance coverage to protect against potential liabilities.

In conclusion, the rapid take-up of EV cars and the growth of public EV chargers is a positive development for the environment, but it also comes with risks that must be understood and managed. We can ensure a safe and successful transition to electric vehicles by taking the necessary steps to mitigate these risks.

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