Liberty Technical Update - Making Sense Of Risk
Ensuring safety - it’s not child’s play.
Hoverboards. The very name conjures up futuristic, ‘Back to the Future’ images,
which may go some way towards explaining why hoverboards were the most
sought-after present last Christmas. Despite their popularity however, perhaps never
has a consumer product failed so spectacularly to deliver on its surrounding hype.
The world’s media has reported on numerous incidents of personal injury to users,
as well incidents involving self-ignition of hoverboards while in use or during
charging. As a result, many airlines have now placed a total ban on the carriage of
hoverboards as check-in or carry-on baggage.
What exactly is a hoverboard? It is a self-balancing, two-wheel board or self-balancing
electric scooter; a portable, ride-on electric device which can reach speeds of about
15 kilometres per hour. Typically, a hoverboard consists of an electric motor, a rechargeable
lithium battery and a gyroscope.
Given the availability of electric motors, rechargeable lithium batteries and gyroscopes,
it is not surprising that multiple variations of hoverboards from different manufacturers
flooded the market to meet the pre-Christmas consumer demand. The range included
hoverboards that cost less than $300, as well as higher-quality brands that cost as
much as $1,500.
Where’s the problem, and what’s being done?
The risk of fire and explosion associated with hoverboards is thought to stem from
the use of rechargeable lithium batteries as their power source. These hoverboard
batteries are bigger in capacity than those found in typical consumer electronic
applications such as smart phones, tablets and laptops. In order to meet market
demand (especially at the lower end of the price range), some hoverboards are
made from cheaper components. Typically, this includes cheaper, and often therefore
poorer-quality, batteries that are more likely to fail during charging, or even during
normal use.
The US Consumer Product Safety Commission and the Australian Competition
and Consumer Commission (ACCC) have begun investigations into the various
hoverboard issues, with the ACCC issuing product recalls in Australia for several
types of hoverboard. Although investigations are still ongoing and the proximate
cause of the hoverboards’ self-ignition has not yet been determined conclusively,
the evidence suggests - and most experts agree - that overheating or short-circuiting
of the lithium batteries (especially poor-quality batteries) is to blame.
What can we learn from this?
Unfortunately incidents such as those involving hoverboards are unlikely to
be isolated in this world of constant innovation and easily accessible, cheap
manufacturing. Consumers have a voracious appetite for fun, innovative and
reasonably priced products – we need look no further than the increasing
popularity of drones, e-scooters and wearable technology for proof – and where
there is demand, someone will find a way to satisfy it.
Although we may not be able to predict the next hoverboard-equivalent product,
Liberty International Underwriters (LIU) Asia Pacific chooses to be proactive.
LIU’s Casualty Underwriters therefore routinely engage the services of our
in-house Casualty Risk Engineers to identify and investigate the risk exposures
associated with existing and emerging products.
Our specialist Casualty Risk Engineers have been in the forefront of identifying the
safety concerns of lithium batteries, well before their association with hoverboard
fires. Their research has included numerous site visits to rechargeable battery
manufacturers in China and to product manufacturers that incorporate such batteries
into their goods.
LIU’s Casualty Risk Engineers work collaboratively with our Underwriters, brokers
and clients not only to develop an in-depth understanding of each client’s business,
but, where appropriate, to offer them best-practice advice on implementing measures
to mitigate risk.
To find out more about the LIU Risk Engineering advantage, or to contact your local
LIU office, visit:
www.liuaustralia.com.au/risk-engineering/overview
This information is presented by Liberty International Underwriters, a trading name of Liberty Mutual
Insurance Company, ABN 61 086 083 605 (Incorporated in Massachusetts, USA. The liability of
members is limited). It is a general comment only on the subject matter, and should not be relied upon
as advice or any definitive statement of law in any jurisdiction. Obtain your own professional advice
before applying this to your circumstances. This information is current as at April 2016.