Deformation of polymer separators for Li-ion batteries has been studied under biaxial tension by using a dome test setup. This deformation mode provides characterization of separator strength under more complex loading conditions, closer representing deformation of an electric vehicle battery during crash event, compared to uniaxial tension or compression. Two polymer separators, Celgard 2325 and Celgard 2075 were investigated by deformation with spheres of three different diameters. Strains in separators were measured in situ by using Digital Image Correlation (DIC) technique. The results show consistent rupture of separators along the machine direction coinciding with areas of high strain accumulation. The critical first principal strain for failure was independent of the sphere diameter and was determined to be approximately 34% and 43% for Celgard 2325 and Celgard 2075 respectively. These values can be taken as a criterion for internal short circuit in a battery following an out-of-plane impact. A Finite Element (FE) model was built with the anisotropic description of separator behavior, derived from tensile tests in orthogonal directions. The results of simulations predicted the response of separator rather well when compared to experimental results for various sizes of rigid sphere.