Thousands of Chinese Heavy Equipment in Indonesia Are at Great Risk Without Proper Insurance Coverage!

Chinese Heavy Equipment Invasion of Indonesian Projects

In the last decade, Indonesia has become the main field of expansion for heavy equipment giants from China.

Names like SANY, XCMG, Zoomlion, Liugong, SDLG, Shantui, Lonking, Lovol, Foton, XGMA, and Yutong are now common sights in mining projects, dam construction, road infrastructure, and large energy projects across the archipelago.

With competitive prices, soft financing, and improved technology, heavy equipment from China has become the primary choice for many contractors and distributors.

However, amidst this boom, a major, often unseen threat has emerged: thousands of Chinese heavy equipment units in Indonesia are not properly insured.

Many owners and distributors only realize when an accident occurs — equipment is damaged, burned, or sunk — only to have their insurance claims denied.

And what’s more ironic, most of these cases could have been avoided if they had worked with a professional insurance broker like L&G Insurance Broker from the start.

Shocking Fact: The Police Exist, But They Don’t Provide Real Protection

Many heavy equipment companies or distributors feel calm because they “already have insurance”.

But when a major loss occurs, it is realized that the policy they have does not cover the actual risks they face.

Real cases handled by L&G Insurance Broker show the same pattern:

• There is heavy equipment that is covered by a Fire & Allied Perils policy, even though it should be covered by a Contractor’s Plant & Machinery (CPM) policy.
• Many policies do not include Operational Risk Extension, so damage while the equipment is in operation is not recognized.
• There is also heavy equipment that is insured using a motor vehicle policy, which legally does not apply to heavy equipment, so the claim is automatically void.

As a result, customers who have paid premiums for years do not receive a single penny in compensation when losses occur.

Why Do Many Chinese Heavy Equipment Companies Have Wrong Insurance Strategies?

This problem is not because the insurance product is bad, but because the policy closing strategy was wrong from the start.

Following are the most common causes found in the field:

1. Managing Insurance Yourself Without Expert Assistance

Many distributors and contractors close policies directly with insurance companies without going through a broker.

The motivation is simple: to be fast and cost-effective.

But that decision actually opens up huge risks — because they don’t understand the difference between “insurance that is issued” and “insurance that actually protects.”

As a result, the policy held only appears to be administratively valid, but does not guarantee the actual risk.

2. Relying on Personal Agents Who Lack Technical Competence

Many companies use insurance agents who are colleagues or personal acquaintances.

The problem is, most agents don’t have:

• Technical expertise in writing policy terms & conditions (T&C).
• Ability to negotiate with foreign reinsurance.
• Authority to assist in the process of large value claims.

When the claim is small, it may still be possible to settle it. But when the claim is worth billions of rupiah, the agent has no bargaining power whatsoever.

3. Weak Policy Wording and Not Adapted to Field Risks

The contents of the policy (wording) are the highest legal basis in the world of insurance.

Once approved and signed, its contents cannot be changed.

Unfortunately, many heavy equipment policies in Indonesia use standard wording that does not cover actual operational risks.

For example:

• Does not include Overturning Clause (overturned)
• Does not cover Flood, Landslide, or Subsidence
• Does not have an Impact or Collision Clause

When incidents such as equipment tipping over or flooding occur, insurance companies have the right to reject claims because they are “not covered by the policy.”

4. Incomplete Claim Documents

Insurance claims require neat technical and legal documentation.

If the report is late, the photographic evidence is incomplete, or the equipment is repaired before being surveyed, the claim may be legally void.

Without mentoringbrokers, many clients do not know what steps to take when a loss occurs.

Real Impact: From Asset Losses to Financial Crises

Losses due to wrong insurance strategies are not just an administrative problem.

The effects could ripple throughout the Chinese heavy equipment business chain in Indonesia:

1. Direct Loss on Assets
   • One SANY or XCMG excavator unit is worth IDR 2–5 billion.
     If the damage is total and the claim is rejected, the loss will be borne by the distributor or leasing company.

2. Cashflow Disturbances and Bad Debts
   • The majority of heavy equipment purchases are made on credit.
     If the unit is damaged without a claim, the customer defaults, and the distributor bears a large burden.

3. Reputation Destroyed
   • Clients from the mining or infrastructure sector will lose trust and switch to other brands.
     Once a reputation falls, it takes years to recover.

4. Relations with Chinese Manufacturers Fractured
   • Manufacturers in China often blame local distributors for negligence — when the root of the problem is a faulty insurance system from the start.

Case Study: Liugong’s Huge Claim Finally Paid in Full

One of Liugong’s major heavy equipment distributors in Indonesia once faced a serious disaster. Three wheel loaders overturned and were severely damaged at a nickel mine in Sulawesi. The initial claim was rejected because the policy did not include an overturning clause. The estimated losses approached Rp 10 billion.

L&G Insurance Broker then intervened:

• Examining policy wording in depth.
• Finding a legal loophole in the “Accidental Damage” clause.
• Submit technical arguments and independent evidence to foreign insurance and reinsurance parties.

The results were outstanding — the claim was paid in full.

Distributors were saved, relationships with strategic clients remained intact, and manufacturers’ confidence in China was restored.

Insurance Brokers: The Frontline of Your Business Asset Protection

There are still many who do not understand the basic differences betweeninsurance agent And insurance broker.

Brokers like L&G Insurance Broker are not just policy sellers, but risk consultants and strategic asset protection.

Our main task is to ensure that every risk of your business is truly guaranteed and can be claimed without any obstacles.

L&G Insurance Broker’s Advantages in China’s Heavy Equipment Industry

✅ Over 20 Years of Experience
Experienced in large projects in the mining, construction, energy and national infrastructure sectors.

✅ Thousands of Heavy Equipment Units Protected
We have insured thousands of units of heavy equipment from various Chinese brands — both owned by distributors, contractors, and leasing companies.

✅ Professional Technical and Claims Team
Consisting of risk engineers, underwriters, and legal experts who are skilled at interpreting policy wording and fighting for claims until they are paid.

✅ Close Relationship with Global Reinsurance
We partner withreinsurerinternationally renowned to expedite the payment process for large-value claims.

✅ Integrated Digital System – LIGASYS
Clients can monitor all policies, claims, and payment status in real-time with full transparency.

Strategic Steps for Chinese Heavy Equipment Distributors and Principals

If you are a distributor, principal, or contractor using Chinese heavy equipment, take these steps before it’s too late:

1. Audit All Active Police
   Ensure that the policy type, clauses, and limits are in accordance with the actual risks in the field.
2. Use a Professional Insurance Broker
   Work with a broker like L&G to ensure every asset has truly comprehensive protection.
3. Implement an Integrated Insurance System
   Use a combination of Marine Cargo + Contractor’s Plant & Machinery (CPM) + Public Liability + Machinery Breakdown to cover the entire risk chain.
4. Build Long-Term Partnerships with Brokers
   The longer the relationship, the stronger your negotiating position with the insurance company.
5. Enhance Internal Team Knowledge
   Brokers can provide regular training so your team is ready to deal with incidents and claims without panic.

Don’t Wait for Disaster to Act

Every day, thousands of Chinese heavy equipment machines operate on vital projects across Indonesia, worth trillions of rupiah. However, many operate without adequate protection.

Don’t let a small mistake in insurance strategy destroy your big business.

Use the services of a professional insurance broker who understands the world of heavy equipment more deeply than anyone else.

L&G Insurance Broker has a proven track record of saving many distributors and contractors from significant losses. We stand on your side, not the insurance company’s.

About L&G Insurance Broker

L&G Insurance Broker is one of the leading independent insurance brokers in Indonesia with over two decades of experience in handling:

• Heavy Equipment Insurance
• Construction & energy projects
• Mining & large industry
• Marine Cargo & Liability Insurance
• Financial insurance & surety bonds

We understand the operational risks of Chinese heavy equipment more deeply than anyone in the industry — because we have handled thousands of units and dozens of large claims with successful outcomes.

Remember: Insurance is not just about buying a policy, but about who stands with you when a claim occurs.

Make sure it’s L&G Insurance Broker.

HOTLINE L&G 24 JAM: 0811-8507-773(CALL – WHATSAPP – SMS)

Website: lngrisk.co.id

Email: halo@lngrisk.co.id 

Don’t delay. Protect your business and reputation now.