Three fire risks are quietly reshaping the UK property insurance market, and each is moving faster than the industry’s response to it. Ageing solar installations, lithium-ion battery fires and butane hash oil explosions linked to organised crime are generating losses of a size and complexity that current policy wordings and underwriting assumptions were not designed to address.

Ageing solar panels

Solar photovoltaic (PV) fire incidents increased 60% between 2022 and 2024, consistent with reports that UK fire services attended a solar panel fire roughly every two days in 2024. The risk is driven by absent maintenance: domestic solar systems carry no legal maintenance requirement, allowing small degradations to shift from benign to hazardous undetected. 

Recent high-profile incidents illustrate the severity: a Lidl warehouse in Peterborough, a seven-storey block of flats in Lewisham and Shanklea Primary School in Cramlington all suffered fires directly attributed to solar panels in 2024, prompting Northumberland County Council to disconnect solar panels at 80 schools and public buildings. Solar fires typically start out of sight on live electrical equipment; fire spreads rapidly through roof spaces and sometimes into neighbouring properties, compounding property damage and business interruption exposure.

For insurers, the maintenance gap raises important drafting questions. Maintenance obligations must be drafted as conditions precedent to liability, with specific, measurable requirements, rather than vague duties to maintain in good condition, which may only give rise to a damages remedy rather than a right to decline the claim. Even then, the insurer must establish that the breach was the proximate cause of the loss: a fire caused by a manufacturing defect rather than maintenance failure will not engage the condition. Any maintenance conditions, including requirements for inspection by an MCS-registered installer, must be clearly communicated at inception to be enforceable. 

Lithium-ion battery fires

UK fire brigades now respond to a lithium-ion battery fire every five hours, a 147% increase since 2022, with e-bikes accounting for approximately 30% of incidents. Almost half of all such fires occur in homes, with a further 45% of incidents involving everyday devices such as mobile phones, tablets and power packs. The danger lies in thermal runaway, an irreversible chemical reaction that spreads faster than ordinary combustion.

Conventional approaches to managing such fires includes flowing up to 10 times’ more water over a prolonged period or letting it burn out, but these approaches are not appropriate for aircraft or maritime vessels. New methods for controlling thermal runaway are being trialled but are yet to be fully rolled out.

At sea, lithium-ion battery fires pose catastrophic exposure. The car carrier Morning Midas was lost after a fire broke out on a deck carrying a number of electric vehicles. Authorities have pointed to the EV batteries as the likely cause, though the precise cause remains under investigation. The International Maritime Organisation has issued more stringent transport guidelines, and marine insurers are overhauling contracts with tighter disclosure requirements and battery-specific exclusions .

The regulatory landscape is also shifting. The Product Regulation and Metrology Act 2025 gives the government power to impose safety obligations on online marketplaces and manufacturers through secondary legislation, and once in force, will improve subrogation prospects against non compliant manufacturers and platform operators. However, the present gap between Royal Assent and substantive reform represents a window of heightened, under-addressed risk, while the marked in electric vehicles, bikes and scooters continues to surge.

Butane hash oil explosions

While cannabis cultivation insurance claims are said to have been halved since 2022, reflecting insurers’ response through targeted policy exclusions and conditions, a more dangerous trend is emerging: butane hash oil (BHO) production. BHO is produced by dissolving cannabis in a pressurised chamber containing butane gas; heat is applied to evaporate the butane, leaving a concentrated cannabis extract. Butane is, of course, highly flammable – if concentration reaches sufficient levels, or the vapour contacts a naked flame, it explodes. The explosion radius of BHO incidents far exceeds that of traditional cannabis farm fires.

Organised crime gangs target vacant commercial premises and rented residential properties nationwide. The legal exposure for insurers is significant and multi-layered. Policies may exclude deliberate criminal acts by the insured, but third-party claims from neighbouring property owners and injured tenants, brought in negligence or nuisance, may fall to cover depending on the scope of cover and the degree of the landlord’s knowledge of the illegal activity.

Where a landlord has failed to carry out routine inspections or has accepted cash rent payments without tenant verification, the prospects of successfully resisting such third-party claims diminish considerably. Recovery against the perpetrators is, in practice, rarely worth pursuing. The real protection is at inception. 

Key takeaways for insurers

• Solar panels: Treat rooftop solar as an ageing electrical installation. Consider imposing maintenance obligations, including inspection by an MCS-registered installer, as a condition of cover, and review business interruption exposure for commercial properties given the complications of firefighting live electrical systems and the absence of any statutory maintenance obligation.

• Lithium-ion batteries: Consider whether current 'fire' definitions and exclusions adequately address the distinct characteristics of thermal runaway. Endorsements or warranties requiring certified products, OEM chargers, and safe charging locations may be appropriate, but insurers should be mindful of Consumer Duty obligations when imposing conditions on unsophisticated domestic insureds, ensuring any such conditions are clear and proportionate.

• Marine EV risks: Ensure policy documentation requires exhaustive disclosure of lithium-ion battery cargo and compliance with IMO guidelines on stowage and fire detection. Severity, not frequency, defines this risk; total loss of a vessel and its cargo is a realistic outcome if a fire occurs.

• BHO explosions: Review exclusion frameworks for illegal activity, ensuring they address BHO risk without inadvertently cutting off legitimate third-party claims. Require landlords to conduct regular – bi-annual or quarterly - inspections, verify tenants, and avoid cash rent payments.

• Proactive claims handling across all three perils: Early instruction of specialist forensic investigators is essential to establish causation, preserve evidence and identify applicable exclusions before critical evidence is lost, particularly given that fire scenes in BHO cases may initially present as gas explosions, and marine total loss situations leave little available for post-incident investigation.