On Not Choosing Ostrich Insurance

There was a loud pop and I heard Ian yelp. That second noise in itself had my hackles straight up as he was the sort of supremely stoic fellow who’d slide his road bike through an intersection on a sheet of black ice at 30km/h and still ride in the next morning. As I spun around in my chair I’m not certain if the acrid smell or the few foot high flames caught my attention first, but either way, it was the first and only time in my life that I’ve used a fire extinguisher and it’s an event that I can see as clear as day many, many years later. 

The hard-shell battery case of an HID light that Ian was working on had spontaneously caught fire while charging. We had a policy of only having batteries plugged in when we were in the building, and his workflow, repairing light systems, was such that I’m positive it wasn’t overcharged. The smell lasted the rest of the day. They were still finding dust from the extinguisher years after I left. 

At the time I never would have thought to ask, but if that battery had ignited the box of systems in inventory for repair, or the box of replacement batteries for warranty replacements, or both, and then spread to the greater business, I would have certainly been out of a job? Does the business carry interruption insurance that extends to my wages if it burns to the ground? Has that insurance coverage been updated to reflect the current realities of the business, of storing and servicing battery-powered light systems?

The bike industry – sales and service – has changed dramatically over the last few years and with the very rare exceptions that are RIY (ride it yourself) dedicated shops there has been a significant increase in the number and size of batteries on hand at any given time. I’ve talked to a number of folks in shops about their policies for storing and charging batteries and there is clearly no consensus. Some shops store e-bikes in a dedicated area, have increased their fire protection, and only plug them in when there is staff on hand. Others are covering their ears, closing their eyes, and saying “LALALALALALALA” really loudly. Most are somewhere in between.

I’ve talked to two shop owners who have approached their insurance providers about the amount of work they’ve been doing on motor-assisted bikes and have seen that reflected in large increases in their yearly insurance costs. One is no longer servicing and supporting e-bikes because relative to the size and flow-through of their shop it didn’t make financial sense. The other is considering a higher hourly labour rate for e-bikes to accompany the higher costs. In both cases, the shop is aware of what they’re covered to work on. 

I was on the fence about writing this, my bias around e-bikes being fairly well documented, and frankly, I’d rather write about rigid single speeds any/every day. But, in the wake of North Vancouver’s “first e-bike battery explosion,” I feel it needs to be said somewhere (anywhere?) that folks talk about the state of the bike industry. If you’re working in a shop, I think it’s okay to confirm – as you would if you had questions about any part of your compensation package – whether the shop is insured to cover your wages in the event it can’t operate and that they’re carrying liability insurance that covers the type of machines you’re actually selling or servicing. 

If you own or are managing a shop, have you had a conversation with your insurance broker about their previsions and your provisions to preserve your coverage when selling and servicing e-bikes? Do you carry insurance to keep your staff on in the event of a sudden, temporary, halt to operations? If you don’t mind having the conversation I’d love to hear about your experience so that I can pass it on to others. 


UPDATE:

Saw this on Pinkbike this afternoon

How many shop insurance policies are built for when the only batteries charging or stored in a shop were the phones and a few light systems?
How many shop insurance policies are built for when the only batteries charging or stored in a shop were the phones and a few light systems?

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