The following article discusses the importance of heavy equipment insurance in Indonesia, even for units imported from China.
Key Points:
- Insurance Obligations: Even if the heavy equipment comes from abroad (e.g. China), the unit is still required to have a valid insurance policy in Indonesia to protect against losses due to damage, loss, and third party liability.
- Why Imported Heavy Equipment Needs to be Insured:
- The origin of the unit (China) is not a guarantee of automatic protection against operational risks in Indonesia (accidents, natural disasters, theft).
- Projects in Indonesia have specific risks (extreme terrain, weather, local regulations) that are not covered by the manufacturer’s warranty.
- The investment value of heavy equipment is very large, so losses can reach billions of rupiah without protection.
- Operational failures without insurance can lead to project delays, contract penalties, and reputational damage.
- Role of Insurance Broker (L&G Insurance Broker): Brokers are superior to agents or direct purchasing because:
- Represent the interests of the insured (you), not the insurance company.
- Helping to choose the best insurance company, negotiate coverage and favorable premiums.
- Providing full assistance in handling claims until they are disbursed, so that the insured is not “alone”.
- Able to negotiate tailor-made coverage (according to local business conditions and risks) and understand import/local regulations.
- Relevant Police Types:
- Heavy Equipment Insurance: Protects off-highway heavy equipment units (excavators, cranes, etc.) from sudden physical damage, fire, theft, etc.
- CPM (Contractor’s Plant & Machinery) Insurance: More comprehensive protection, covering heavy equipment and plants (machines) while working (at work), at rest, and when dismantled for maintenance (under overhaul), very suitable for imported units that frequently change locations.
- Tips for Choosing a Policy: Ensure the policy covers all phases (from delivery to operations), choose All Risks or Comprehensive, pay attention to the age of the unit/project location, and ensure the broker understands the field conditions in Indonesia.
Don’t delay using heavy equipment insurance to get immediate protection.and please consult your insurance needs with L&G Insurance Broker for a free consultation regarding heavy equipment insurance.
Contact: WhatsApp at 08118507773 or email to halo@lngrisk.co.id
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In an era of massive construction and increasingly expansive mining, many companies are choosing to incorporate heavy equipment, including Chinese-made equipment, into projects in Indonesia. However, be aware that even if the equipment is imported from abroad, you are still required to have a policy of heavy equipment insurance valid and relevant in Indonesia. Without proper protection, you risk significant losses, including damage, loss, and third-party liability.
As a professional insurance broker such as L&G Insurance Broker We are not just a policy seller, but also your strategic partner in risk management. Unlike agents who only sell products from one insurance company, an independent broker represents you as the insured: helping you select the best insurance company, negotiating appropriate coverage, and most importantly, resolving your claim.
If you only purchase insurance through an agent or directly from an insurance company without competent support, you could face significant challenges when a claim arises. Brokers like L&G can ensure you’re not left alone during the claims process.
👉 For a free consultation regarding heavy equipment insurance or other protection, please contact WhatsApp at 08118507773 Or email halo@lngrisk.co.id. Our team is ready to assist you in simple, easy-to-understand language without complicated jargon.
Why Does Imported Heavy Equipment from China Still Need to Be Insured?
- Unit origin is not a guarantee of automatic protection
Heavy equipment from China may be of good quality and competitively priced, but the fact that the units are purchased overseas doesn’t eliminate the risks faced by Indonesian users: operational damage, accidents, natural disasters, theft, and third-party liability. Heavy equipment insurance products help cover these risks. - Projects in Indonesia have specific risks
Construction or mining projects in Indonesia often involve extreme terrain, weather fluctuations, complex work areas, and local regulations. Relying solely on a Chinese manufacturer’s warranty offers insufficient financial protection against operational damage or lost equipment. Heavy equipment insurance products include “heavy equipment insurance,” with coverage tailored to local risks. - Big investment value = big risk
Heavy equipment units, including those imported from China, require significant investment: purchase, shipping, import duties, installation, and operator training. When major damage occurs, direct losses can amount to hundreds of millions or even billions of rupiah. Heavy equipment insurance policies reduce this financial burden by providing compensation or repairs as stipulated. - Operational failure without protection = reputational risk & additional costs
If a unit stops working due to damage or loss without insurance, the impact is not only direct costs but also project delays, contract penalties, and reduced client confidence. With heavy equipment insurance, you have backup to ensure operational continuity.
Therefore, even if your heavy equipment comes from China, don’t take lightly the obligation to have proper insurance coverage in Indonesia.
The Role of Insurance Brokers vs. Agents/Directors – Why Are Brokers Superior?
- Brokers represent you, not insurance companies.
Agents are generally directly affiliated with an insurance company and sell their products. If you choose an agent, your options are limited to one company’s products, and you may be forced to choose the easiest one to sell. Meanwhile, brokers like L&G work for you: comparing multiple insurance companies, securing the best coverage, and negotiating favorable premiums and terms. - Claim handling until completion
A major difference arises when a claim arises. Without a broker, you’d be left to fend for yourself after filing a claim and would have to deal with the insurance company and surveyor, prepare documents, and negotiate compensation amounts. With a broker, you have a partner who can assist you, from gathering documents and coordinating with surveyors to ensuring claims are paid out and payments made. This is especially crucial for assets as large as heavy equipment. - Negotiate tailor-made coverage according to your business conditions
Heavy equipment in Indonesia has specific operating conditions (mining, construction, extraction) and different risks. An experienced broker will help you choose the appropriate policy wording, such as an “all risks” or CPM (Contractor’s Plant and Machinery) policy, taking into account the unit’s age, project location, terrain conditions, and type of use. - Understanding local & global regulations
Importing equipment from China may have special requirements related to import duties, taxes, installation, and possibly manufacturer warranties. An experienced broker will help you understand local insurance regulations in Indonesia, the potential risks of importation and local operations, and ensure your policy covers these gaps.
In short: don’t just buy a policy; use a broker as your protection partner. This is especially true for strategic assets like heavy equipment, which require extra attention when making claims.
Exploring Types of Policies: Heavy Equipment Insurance and CPM
Heavy Equipment Insurance
Often called “heavy equipment insurance”, this policy protects heavy equipment units used in the field (off-highway) such as excavators, bulldozers, wheel loaders, dump trucks, cranes, and others.
Object of insurance: all types of heavy equipment used in construction, mining, plantation and heavy logistics projects.
Covered risks: sudden physical damage (accident, impact, overturning), fire/explosion, damage due to extreme weather, theft, even mechanical or electrical damage if extended.
General exceptions: gradual wear/damage, corrosion, manufacturing defects, use beyond specifications, deliberate accidents.
Superiority:
- Protecting large investment values.
- Support project operational continuity.
- Can be tailor-made to suit unit conditions, location, age, and usage.
When should it be considered?
As soon as you operate heavy equipment on a project especially if the unit is imported, operates in rough terrain, or is used in a high-risk contract.
CPM (Contractor’s Plant & Machinery) Insurance
CPM (Contractor’s Plant & Machinery) Insurance is a type of insurance intended for construction equipment and plant (machinery), not only mobile heavy equipment, but also fixed or semi-fixed equipment, as well as plants located on project sites. As heavy equipment is used, sometimes broader coverage is required: when the unit is not operating (“at rest”), being dismantled for maintenance or overhaul, in transit or during transportation.
Guaranteed objects: heavy equipment & plants, including supporting equipment for construction, industrial, mining and other projects.
Risk coverage: covers damage or loss while the unit is working, while it is parked, or while it is dismantled for maintenance or overhaul.
Why is it important?
Because large projects involve more than just normal operation, units undergo maintenance, dismantling, transport, on-site storage, and sometimes idle periods. A standard heavy equipment policy may not cover these phases. CPM provides more comprehensive protection across the entire unit’s operating lifecycle.
Notes: Make sure the policy covers “at work”, “at rest”, and “under overhaul” conditions if the unit is imported from China or a large unit that frequently changes project locations.
Case Study: Imported Heavy Equipment from China — An Often Overlooked Risk
For example, if you buy an excavator from a Chinese manufacturer at a competitive price, without heavy equipment insurance, or relying solely on the manufacturer’s warranty, here are some potential scenarios:
- The unit arrived at an Indonesian port, but the installation process was slightly flawed due to suboptimal local adaptation specifications. Mechanical damage occurred, not due to an accident, but rather due to suboptimal initial use. Without the appropriate clauses, it may not be warranted.
- The unit operates in a mine with muddy soil conditions and frequently moves between mining blocks. Without a policy covering damage caused by extreme operating conditions, you’ll be responsible for the repair costs yourself.
- The unit was stored idle during shipping to a second location, or was undergoing overhaul and was burned or stolen. If the policy only covers “units in operation” and does not cover idle or off-site operations, the loss may not be covered.
- Your contract with the client requires the unit to be insured until the claim is settled. If you fail to provide adequate coverage for risks other than financial, there will be contractual penalties and the company’s reputation will suffer.
All of the above scenarios show that only with the right protection through a broker who understands local conditions, import risks, and the appropriate policy type can you be safer.
Why Should You Act Immediately?
- Your project is underway, units have or will enter the field, delaying the purchase of heavy equipment insurance means you are operating without risk protection.
- Unit and project values continue to increase: premiums may increase or policy conditions may become more stringent if you wait until damage occurs.
- When a claim arises, time is of the essence. A broker who prepares documents, surveys, and communications can make a huge difference between a successful claim and a delayed/rejected claim.
- Imports from China can bring additional variables: specifications, shipping conditions, engine adaptations, and idle time during delivery/installation must all be factored into the policy.
- If you only deal with an agent or buy directly from an insurance company, you may have to do everything yourself during a claim, not just preparing documents but also negotiating, verifying, and securing payment. If you use a broker, they handle this.
Tips for Choosing the Right Policy for Imported Heavy Equipment
Here are some tips to help you choose the right policy:
- Ensure the unit is guaranteed from the time of delivery to operation.
Heavy equipment imported from China may go through a process of delivery, installation, and commissioning. The policy should cover these phases. - Choose the policy wording “All Risk” or Comprehensive
To ensure coverage for both partial and total damage, a standard policy may only cover Total Loss Only (TLO), allowing partial repairs to be covered. - Pay attention to the age of the unit, project location, frequency of unit mobility
These factors will affect premiums and coverage. Hard-to-reach locations or difficult terrain increase the risk. - Ensure protection when the unit is idle, under maintenance, or being moved.
If the imported unit frequently moves between projects, maintenance or overhauls, then the CPM policy option could be very suitable. - Verify that the broker/underwriter understands the Indonesian field conditions
This is crucial to ensure the policy wording truly matches the risk conditions in Indonesia. Independent brokers like L&G can provide consultation and guidance. - Completely document the unit: specifications, year of production, condition when received, photos, operational location.
This data is important when making a claim, especially if the unit is imported from China, which may have different specifications. - Know the claims process and required documents
Reporting time and proof of claim must be met so that your loss can be accessed. - Don’t just look at the lowest premium
Cheap premiums but low coverage or many exclusions can leave you with big losses if an incident occurs.
Why L&G Brokers is for You
As a broker with experience handling various heavy equipment projects in Indonesia, L&G Insurance Broker has the following advantages:
- Understanding Indonesian market conditions for heavy equipment & infrastructure projects including imported units.
- Can access some of the best insurance companies so you are not limited to just one product choice.
- Providing complete services up to claims: from risk assessment, policy recommendations, documentation preparation, to claims assistance.
- Becoming your advocacy partner in the event of a major loss, the broker will coordinate, accompany you, and ensure that your rights as the insured are fulfilled.
Therefore, if you own heavy equipment (including those from China) that will be operated in Indonesia, don’t compromise on protection. Use a broker like L&G and take advantage of the free consultation. Call 08118507773 (WhatsApp) or email halo@lngrisk.co.id now.
Cover
Operating heavy equipment, especially imported units from China, means entering an arena with potentially significant risks, both financial and operational. By choosing to own…heavy equipment insurance By choosing the right broker through a trusted broker, you not only protect your assets but also maintain business continuity, reputation, and peace of mind.
Don’t buy only through an agent or directly to an insurance company without competent assistance because if a claim occurs, only L&G Insurance Broker can really help you until the claim is disbursed.
Take protective measures immediately: free consultation with us at 08118507773 or send an email to halo@lngrisk.co.id.
