Stop and think for a minute – how many devices do you use on a daily basis that have batteries? Your cellphone, laptop, tablet, television remote, electric toothbrush, home robot devices and garage door opener to name a few. Then there are other devices that you might not consider – children's toys, baby monitors, smoke and carbon dioxide detectors, electric cars, wine openers and even something as mundane as a pepper grinder.
Less than 50 years ago, the average home had two items that ran on batteries – probably a flashlight and a transistor radio. Today, homes are more likely to have at least 30 devices that require battery power.
Batteries are also being used to run large enterprises, providing businesses with a wide range of energy alternatives. However, this increased use also brings new liability exposures.
Product liability
The vast majority of batteries are manufactured in Pacific Rim countries that may not adhere to the same standards used in the U.S. and Canada. When there is a performance issue, it can reverberate around the globe. Consider the exploding Hoverboard batteries, the issues with the Samsung Galaxy Note 7 mobile phone and fires involving e-cigarettes.
Even if an insurer can prove liability related to the foreign-made battery, subrogation will be extremely difficult and the cost of the loss may be borne by the insurer indemnifying the company that sold or manufactured other components of the product.
All of these issues raise new questions about liability and who pays for damages. If a battery explodes in the cargo hold of a plane or an overhead bin in the passenger cabin and the plane crashes – the airline and its insurer bear liability for the crash. If a home burns down because of a faulty battery in a device, the owner's homeowners insurance will most likely pay for the loss. Our cover story looks at all of these issues and the impact of this growing liability.
For insurers who want a more global look at some of the new liabilities insurers will be facing, join us at the America's Claims Event in Austin, Texas from June 25-27. It's where insurance professionals learn from a wide range of experts what issues will affect their businesses and their clients, and how to prepare for these new challenges. Visit www.americasclaimsevent.com for more details. See you in Austin!
Patricia L. Harman is editor-in-chief of Claims magazine. Contact her at pharman@alm.com. Opinions expressed are the author's own.
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