Fire is no longer just a chance risk. In fact, more than 70% of fires in Indonesia occur in businesses, from restaurants and hotels to warehouses and retail stores. This figure, confirmed by data from the national fire authority, is a warning sign for businesses. Ironically, most businesses still view fire as a “rare” disaster, not a business risk that can and should be managed effectively.
In fact, a single spark from an electrical short circuit or employee negligence can destroy entire assets built over years. Data shows that many small and medium-sized businesses never fully recover from fires because they lack adequate financial protection.
Therefore, before risk hits your business, the smartest step is to ensure your business premises are well protected through comprehensive fire insurance, property insurance, and stock insurance. Contact L&G Insurance Broker now at 08118507773 for free consultation before any risk occurs.Our team of experts is ready to help you find the best protection solution according to your needs and risk profile.
Shocking Fact: Most Fires Occur in Business Areas
According to data from the National Disaster Management Agency (BNPB) and the Ministry of Manpower, 70% of fires in Indonesia occur in commercial areas and business premises. The most common types of fires are restaurants, hotels, warehouses, and small offices and shophouses. This high risk is due to several factors inherent in business activities:
- High Intensity of Electricity Usage: Business areas use electronic equipment and lighting during long operating hours, increasing the risk of electrical short circuits and overheating.
- Combination of Hazardous Materials: In the hospitality and F&B (food and beverage) sectors, the risk of fire increases due to the combination of fire (stove), oil (kitchen), and dirty electrical equipment.
- High Inventory Volume: Warehouses and retail stores store large quantities of inventory. When a fire occurs, the losses can multiply significantly, including the loss of inventory, which is essential working capital.
- Old, Unmaintained Installations: Most business buildings still use outdated electrical systems without regular maintenance. As a result, a small spark can quickly ignite a major fire.
This is where the importance of property insurance for businesses and fire insurance for small and medium enterprises lies, not just to fulfill administrative requirements, but also as a protector of business continuity.
Main Causes of Fires in Business Premises
Most business fires have a similar causal pattern, which is unfortunately often overlooked in daily risk management:
- Electrical short circuits: Short circuits remain the number one cause of fires in businesses. Many business owners ignore electrical installation standards, especially in restaurants, hotels, or shops, who continually add electronic devices without adjusting the power supply.
- Human error: Human errors such as forgetting to turn off the stove in a restaurant kitchen, lighting decorative candles unattended, or leaving the refrigerator running overnight are common triggers. In a heavily staffed business, the risk of negligence is especially high.
- Lack of fire protection system maintenance: Many businesses have portable fire extinguishers (APAR) but never maintain them or provide employee training. When a fire occurs, the equipment doesn’t function optimally.
- Flammable materials: Buildings with interiors made of wood, foam, or plastic, such as decoration shops or cafes, are at higher risk because fire spreads quickly.
If these factors aren’t addressed, a small incident can escalate into a major disaster that halts business operations. Therefore, fire insurance coverage for business premises and inventory insurance is a solution every business owner should consider. With the right policy, financial losses from fire can be significantly minimized.
Financial Impact of Fire:Calculating Multiple Losses in Business
The losses from fires don’t stop at the physical damage to buildings. In real-life cases, many businesses have lost assets worth billions of rupiah in just a few hours.
- Fixed Asset and Equipment Losses: Includes damage to buildings, kitchen equipment (for restaurants), cooling systems, and furniture. The value can reach tens of billions of rupiah for hotels or large warehouses.
- Stock Loss: Loss of stock of food ingredients, inventory, or merchandise that constitutes the main working capital of a business.
- Business Interruption: Potential lost revenue due to a business having to temporarily close during the repair process, which can take 6 months to a year.
- Reputational Loss: Customers lose trust, and investors hesitate to reinvest. A damaged reputation is difficult to repair.
This is the primary reason why fire insurance, property insurance, and inventory insurance are strategic necessities, not mere formalities. Without robust commercial property insurance, a business that catches fire risks total crippling losses.
To avoid major losses like this, the smartest move is to ensure your business has comprehensive protection. Contact L&G Insurance Broker now in 08118507773 for free consultation before any risk occurs.
Real Case Study: Restaurant Fire Causes IDR 3 Billion in Losses
Some time ago, a restaurant in South Jakarta caught fire due to an electrical short circuit in the main kitchen. The fire spread rapidly, catching fire from gas cylinders and the wooden interior. Within 45 minutes, the entire restaurant was engulfed in flames.
The losses reached over 3 billion rupiah, covering the building, kitchen equipment, food supplies, and furniture. Worse still, the restaurant lacked fire insurance, as the owner considered the premiums an additional expense. As a result, he had to shoulder all restoration costs himself, and the restaurant never reopened.
This story serves as a valuable lesson for many businesses in the hospitality sector. Without adequate insurance coverage, a single incident can end a business that has been built over years. However, with the support of L&G Insurance Broker, businesses can obtain coverage tailored to their risk profile—from property insurance, stock insurance, to commercial fire insurance. The broker’s role is to ensure the policy you purchase truly provides maximum benefits in the event of a claim.
Practical Pillars of Business Fire Prevention
Fires can be prevented if businesses have proper fire risk management. Here are some practical steps business owners should take:
- Routinely audit electrical installations at least every 6 months (Short circuit is the number one risk).
- Provide APAR and sprinkler systems that are always tested for suitability (first line protection equipment).
- Train employees to deal with emergencies so they know how to evacuate and use fire extinguishers.
- Store important documents and stock in a separate location (off-site) to minimize total loss.
- Use fire insurance and property insurance for financial protection from fire risks (Risk Transfer).
In this case, L&G Insurance Broker not only helps prepare policies but also provides risk analysis and preventative recommendations tailored to your business’s characteristics. This way, protection doesn’t just occur after a fire, but begins long before the risk arises.
The Important Role of Insurance Brokers in Protecting Businesses
Many business owners don’t understand the difference between purchasing a policy directly from an insurance company and through a professional broker. However, insurance brokers like L&G Insurance Broker act as risk advisors who fully support their clients. Here are the key benefits of using a broker:
- In-depth Risk Analysis: Brokers assess every potential hazard that may occur to buildings, equipment, and stock (including operational risks).
- Customized Coverage: L&G ensures the type and value of coverage matches the real needs of the business, not just a standard product (very important to prevent underinsurance).
- Competitive Premium Negotiation: Brokers use extensive networks to get the best premiums with maximum coverage.
- Claims Assistance: In the worst case scenario, your broker will help you prepare the documents and fight for your claim until it is resolved (keeping your cash flow stable).
- Ongoing Consultation: Brokers assist with policy updates and risk adjustments as the business evolves.
With the assistance of L&G Insurance Broker, you can sleep soundly knowing that your business is fully protected from the risk of fire and other financial losses. Contact L&G Insurance Broker now on 08118507773 for a free consultation before the risk befalls your business.
Risk Coverage Recommendations for Business Premises
Based on the high risk level of the business premises, L&G Insurance Broker recommends the following combination of protections:
- Fire Insurance: Protects buildings, equipment and business supplies from fire, explosions and lightning strikes (Main basis of protection).
- Commercial Property Insurance (Property All Risks/PAR): Covers losses due to fire, natural disasters (floods, earthquakes, with extensions), and damage due to riots (wider coverage).
- Stock Loss Cover: Protects inventory and merchandise from damage or loss due to fire (crucial for retail and warehouses).
- Business Interruption (BI) Insurance: Covers income losses during the business recovery process (maintaining cash flow).
- Public Liability Insurance: Protects your business from third-party lawsuits resulting from losses or injuries that occur at your place of business.
With guidance from L&G Insurance Broker, you not only purchase a policy, but also obtain a comprehensive protection strategy that suits your business conditions.
Conclusion
The shocking fact that 70% of fires in Indonesia occur in business premises is a stark reminder of the high operational risks in the commercial sector. Risks triggered by electrical short circuits and employee negligence can wipe out billions of rupiah worth of assets in a short time, as experienced by a restaurant in South Jakarta. These losses are not only physical, but also create a financial domino effect of lost revenue, contract penalties, and damaged reputations. For small and medium-sized businesses, failure to protect assets is a serious threat of bankruptcy.
L&G Insurance Broker serves as a strategic partner and essential risk advisor for every business owner in South Tangerang and throughout Indonesia. We don’t just sell policies; we also design effective protection solutions through Commercial Property and Business Interruption Insurance tailored to your risk profile. Our brokers ensure you avoid underinsurance and claim denials, which often result from policy wording errors. With professional support, L&G ensures a fast and transparent claims process, ensuring your business can recover and bounce back after a disaster.
Don’t wait until a fire destroys your valuable assets to realize the importance of financial protection. L&G Insurance Broker encourages you to be proactive and make insurance a priority investment. A successful business isn’t just one that generates substantial profits, but also one that can withstand unexpected disasters. Secure your profits and reputation now. Contact L&G Insurance Broker now in 08118507773 for free consultation before any risk occurs and ensure your business continues to run smoothly amidst the high risk of business premises fire.
—
DON’T WASTE YOUR TIME AND SECURE YOUR FINANCIAL AND BUSINESS WITH THE RIGHT INSURANCE.
HOTLINE L&G 24 JAM: 0811-8507-773(CALL – WHATSAPP – SMS)
Website: lngrisk.co.id
Email: halo@lngrisk.co.id
—
