Marine Insurance for EV Batteries and Lithium Shipments: A Critical Compliance Tool for Exporters

A cargo ship navigates through the open sea, carrying containers potentially filled with electric vehicle batteries and lithium, highlighting the importance of specialized marine insurance for such high-value and sensitive shipments.

As the EV revolution accelerates, so do the complexities of global shipping. One of the most pressing concerns? Safely and legally transporting lithium-based goods.

Why Lithium Shipments Are High-Risk

Lithium batteries whether standalone or installed in electric vehicles or components—are classified as dangerous goods by major regulatory bodies (IMO, IATA, ADR). These batteries are:

• Chemically reactive

• Prone to thermal runaway and explosion

• Heavily restricted during air and marine transport

Even a small incident can lead to catastrophic fire, vessel damage, or international regulatory action.

How Marine Insurance Helps

A standard marine cargo insurance policy may not cover lithium battery shipments unless properly declared and endorsed with special clauses.

Here’s what a properly structured marine policy should include:

1. Coverage for Dangerous Goods Specific endorsement for lithium batteries, hazardous materials classification, and packaging compliance.

2. Fire, Explosion & Handling Risk Protects against losses during loading/unloading, port storage, or mid-transit combustion.

3. Third-Party Liability Covers claims if cargo damage spreads or harms other shipments or vessel operations.

4. Compliance with International Codes Ensures alignment with IMDG Code, UN Numbers, and packaging protocols — reducing risk of customs detention or legal fines.

Real-World Scenario

A Mumbai-based EV component manufacturer shipped lithium-ion battery packs to Europe. Mid-transit, one pallet sparked a fire onboard due to incorrect packaging. Because they had marine insurance with special lithium risk clauses, damages worth ₹48 lakhs were fully recovered under their policy — covering:

• Lost cargo

• Port demurrage

• Cleanup and legal fees

Do not treat lithium and EV battery shipments like standard cargo. With regulatory scrutiny rising, marine insurance isn't just advisable — it's essential.

If you deal in EV batteries, charging docks, or energy storage components, your marine policy must reflect:

• Nature of goods

• Packing standards

• Trip type and destination

• Local and international regulations