Own or Rent Your Warehouse? Here's Who's Liable When a Lithium-Ion Battery Starts a Fire

A lithium-ion battery goes into thermal runaway in a leased warehouse. A forklift charging overnight, a pallet of returned devices, a staff member's e-scooter on charge near the roller door. The fire spreads. The building is damaged, the tenant's stock is gone, and operations stop.

Then comes the question nobody wanted to ask before it happened: whose responsibility was that?

The honest answer is that it's usually both parties' problem — but in different ways, with different exposures. Owners and tenants protect against different losses, carry different insurance, and have different duties. If you're on either side of a commercial lease, here's how it tends to break down, and what each side should have in place.

This is general information, not legal advice. Your lease and your state's laws govern your actual obligations — read your lease and get advice on anything significant.

The owner / landlord's exposure

If you own the building, your core exposure is the structure itself and your long-term liability as the party who owns the asset.

• Building insurance. You're insuring bricks, roof, racking that's part of the building, and the rebuild cost. Insurers increasingly ask about lithium-ion risk controls on industrial sites at renewal — and a known, uncontrolled risk can affect both your premium and your claim position.
• Base-building fire systems. Sprinklers, alarms and passive fire protection are typically the owner's domain. These matter, but they were designed around conventional fire — not the self-sustaining, reigniting behaviour of a lithium-ion fire.
• Liability and duty. As the asset owner you can carry residual responsibility for the safety of the building, particularly around common areas, shared charging infrastructure, and anything you installed or control.
• Re-letting risk. A serious fire doesn't just cost a rebuild — it costs vacant months and a damaged asset reputation.

What owners should do: treat lithium-ion as a building-risk line item. Where you provide or control charging infrastructure, make sure it's appropriately located and protected. Specify, or require tenants to maintain, first-response equipment at charging and storage points. Document the controls for your insurer.

The tenant / renter's exposure

If you lease the space, your exposure is your operations, your stock, your people — and potentially the damage your activities cause to someone else's building.

• Contents and stock insurance. Your forklifts, your inventory, your equipment. If a battery you brought in starts the fire, your business interruption and stock loss are yours to wear.
• Liability for your activities. This is the one tenants underestimate. If your operations — your forklift charging, your stored batteries, your staff's devices — cause a fire that damages the landlord's building or a neighbour's premises, you can be on the hook for that damage.
• WHS duties to your workers. As the Person Conducting a Business or Undertaking on site, you carry primary work health and safety duties for the people working there, regardless of who owns the walls.
• You usually can't modify the building. Most tenants can't install fixed suppression or rebuild a charging room. That makes portable, non-installed protection your practical lane.

What tenants should do: because you generally can't change the structure, put your effort into response equipment you own and can take with you — blankets and lithium-rated extinguishers at every charging point, containment bags for damaged or quarantined batteries, and trained staff.

Where it gets blurry — and how to handle it

The grey zone is shared or ambiguous infrastructure: a charging area both parties use, batteries stored in a common space, or a lease that's silent on lithium-ion risk specifically.

A few practical moves:

• Read the lease's repair, insurance and indemnity clauses. They usually allocate who insures what and who's liable for damage caused by each party's activities.
• Don't assume the other side has it covered. Owners assume tenants manage their own gear; tenants assume the building's systems will handle it. A lithium-ion fire can outrun both assumptions.
• Put first-response equipment in regardless of who "should." It's inexpensive relative to a single incident, and both parties benefit. If liability is contested later, the party that took reasonable steps is in a far stronger position.

The equipment that suits each side

For tenants (portable, owned by you, moves when you do):

• Lithium-ion rated fire extinguishers at charging points and workshops
• EV fire blankets at forklift charging bays
• Containment bags for damaged or quarantined batteries

For owners (protecting the asset and controlled areas):

• Fire curtains and heavy-duty blankets to isolate shared charging areas
• A specified minimum standard of response equipment written into tenant fit-out or lease conditions
• The full Industrial EV Fire Solutions range for site-wide coverage

The bottom line

In a leased warehouse, lithium-ion fire risk doesn't sit neatly with one party. The owner protects the building; the tenant protects the operation and answers for the activities that caused the fire. The smart move on both sides is the same: don't wait to find out which clause applies. Put the right first-response equipment where the batteries are charging and being stored, document it, and make sure your insurer knows it's there.

Not sure which side of the line your obligations sit on, or what to install? Get in touch and we'll help you spec equipment that fits your role — owner or tenant.

General information only, not legal, insurance or compliance advice. Your lease terms and state legislation determine your actual obligations.