The Infrastructure Project Boom in Bogor and Surrounding Areas
In recent years, Bogor and Cianjur regencies have become centers of major infrastructure development — from new toll roads and inter-regional bridges to housing projects and tourism and energy facilities.
Hundreds of contractors and subcontractors are involved, some using Engineering, Procurement, and Construction (EPC) schemes that involve many parties, many risks, and of course many potential problems.
However, amidst the boom in construction projects, fundamental errors in insurance arrangements are still common. As a result, when accidents occur on the job, insurance claims are stalled—even though the project is already behind schedule and funding has run out.
One of the most interesting cases occurred in the Cugenang area, Cianjur, where a public facility construction project was completely halted because the contractor’s insurance claim could not be paid due to a discrepancy between the policy and the project contract.
Claim Failed Due to Incorrect Policy Format
A local contractor company won the tender for a government building construction project worth Rp 75 billion in Cianjur.
According to the contract with the local government, they are required to have:
- Contractor’s All Risks (CAR) Insurance
- Third Party Liability (TPL) Insurance
These two policies must be issued in the joint name (joint insured) between the local government as principal, main contractor, and supervising consultant.
Unfortunately, in a rush, the contractor purchased a CAR policy from an insurance company through an agent, without paying attention to the clauses and underwriting structure required in the contract.
Several months later, while the casting of the third floor was underway, the scaffolding collapsed and hit workers and passing vehicles.
Losses reached more than Rp 2 billion, including structural damage and compensation to third parties.
However, when the contractor filed a claim, the insurance rejected it on administrative and technical grounds:
- The name of the insured does not match the project contract.
- There is no endorsement that includes the principal (local government).
- There is no extension of guarantee for “surrounding property” and “cross liability”.
- Some work items are not included in the schedule of insured work values.
Ultimately, the claim failed to be processed. The project stalled for months, the contractor was penalized, and the project owner’s reputation was damaged.
This case demonstrates the devastating consequences of mistakes in preparing project insurance documents — mistakes that could have easily been prevented if a professional insurance broker had been on hand from the start.
Why Are There Many Failed Project Claims in Bogor and Cianjur?
Based on the experience of PT. Liberty and General Insurance Broker (L&G), which has handled dozens of EPC, infrastructure, and construction projects in West Java, there are five main reasons why project insurance claims often fail or are delayed for a long time.
- The policy does not comply with the contract requirements.
Many contractors don’t read the details of their work contracts, even though they often contain important clauses such as:
- “Insurance to be arranged jointly in the name of Owner, Contractor, and Consultant.”
- “Policy must include waiver of subrogation and cross liability.”
- “Sum insured must cover full contract value, including temporary works.”
If this clause is not followed exactly, the policy is deemed to be out of contract and may be rejected by both the project owner and the insurance company.
- Purchasing Insurance Directly Without Broker Assistance
Because it is considered just a formality, many contractors buy policies directly from insurance agents without detailed explanation.
In fact, the agent only represents the interests of the insurance company, not the interests of the insured.
As a result, many important things are overlooked — such as the definitions of “contract site,” “maintenance period,” and “principal inclusion.”
When a claim occurs, the contractor realizes that their policy was not designed for the project at hand.
- The insurance value does not match the contract value.
Often contractors insure projects based only on the value of the primary materials (e.g. concrete and steel structures), without including important components such as:
- Temporary works costs
- MEP installation costs
- Labor and supervision costs
- Profit margin
In fact, in an EPC contract, all of these elements are part of the project value that must be insured.
When a large claim occurs, insurance calculates compensation based on the insured value alone — as a result, claims are paid for only a fraction of the actual loss.
- No Expansion for Additional Risks
Construction projects in the Bogor and Cianjur areas are vulnerable to additional risks such as:
- Earthquakes, floods and landslides
- Design errors or construction failures
- Damage to surrounding property (surrounding property)
- Third party injury
Unfortunately, many policies do not include this extended coverage, so claims related to disasters or third parties are immediately rejected.
- Incomplete Claim Documentation
Many contractors have difficulty preparing the documents requested by insurance companies when making claims, such as:
- Chronological photos before and after the incident
- Internal and third-party investigation reports
- Work plan (method statement)
- Proof of value of damaged work
Without complete documentation,loss adjusterunable to verify claims, and ultimately the case drags on without resolution.
The Strategic Role of L&G Insurance Brokers in Construction Projects
As an independent insurance broker, L&G Insurance Broker has extensive experience in handling EPC, infrastructure, and public development project insurance in Indonesia — including in the Bogor, Cianjur, and Sukabumi areas.
Here’s how L&G helps contractors and project owners avoid mistakes like the one above.
- Review and Adjustment of Insurance Contracts
L&G reviewed all contract documents (especially theInsurance Requirement Clause) to ensure that every provision is reflected in the policy.
The result: the policy fully meets the contractual requirements and is acceptable to both the project owner and the supervising consultant.
- Preparation of a Comprehensive Insurance Program
L&G designed an insurance program consisting of:
- Contractor’s All Risks (CAR) – Covers physical damage to construction work.
- Third Party Liability (TPL) – Guarantees legal liability to third parties.
- Workmen’s Compensation / Personal Accident – Protects project workers from injury or death.
- Equipment All Risks (EAR) – Covers heavy equipment at the project site.
- Professional Indemnity (PI) – Covers the liability of consultants and designers.
- Delay in Start-Up (DSU) – Protects against potential financial losses due to delays in project completion.
All are arranged with additional clauses as needed such ascross liability, principal inclusion, automatic reinstatement, And maintenance cover.
- Negotiate the Best Premium and Policy Terms
As an independent broker, L&G is not tied to any one insurance company.
The L&G team will select and negotiate offers from various reputable companies to obtain competitive premiums and the most comprehensive coverage.
- Monitoring and Certificate of Insurance (COI) According to the Project
For government or state-owned enterprise projects, each contractor is required to submit a Certificate of Insurance (COI) which shows the validity of the policy.
L&G ensures that all certificates are issued in accordance with the work contract, including the inclusion of the names of all relevant parties.
- Full Assistance During Claims
When an accident occurs, the L&G claims team immediately steps in to help:
- Prepare claim reports according to insurance format,
- Prepare evidence and photos of the incident,
- Coordinate communication withloss adjuster,
- Negotiate claim settlement to get paid in full and quickly.
The result: claims are paid, projects are not delayed, and relations with the principal remain good.
Case Study: Successful Claims After L&G Assistance
One of L&G’s clients, an EPC company handling a bridge project in East Bogor, experienced a temporary collapse of the formwork during pier casting.
The loss was around Rp. 1.8 billion.
Initially, the insurance company refused because it was considered to be due to “defective workmanship.”
However, L&G looked into the policy details and found a “LEG 2/96 clause” which provided coverage for physical damage due to faulty workmanship.
With technical arguments and field evidence, L&G managed to convinceloss adjuster.
As a result, the claim was paid in full within 45 days.
The project was completed on time, and the contractor’s reputation was maintained.
Important Lessons for Contractors and Project Owners in Bogor-Cianjur
- Project insurance is not just a formality, but a vital part of risk management.
- Every detail of the contract must be reflected in the policy.
- Avoid purchasing insurance directly without professional assistance.
- Ensure that the policy value and coverage match the actual project conditions.
- Use an experienced broker to help with the claims process.
Why Choose L&G Insurance Broker
✅Over 30 years of experience in project and industrial insurance.
✅Has handled EPC projects worth hundreds of millions of dollars throughout Indonesia.
✅Professional technical and claims team with in-depth understanding of FIDIC contracts and international insurance standards.
✅Work independently and on the client’s side.
✅Registered and supervised by the Financial Services Authority (OJK).
Conclusion: Accidents Can Happen, But Claims Must Not Fail
In the construction industry, the risk of accidents is unavoidable. However, financial losses can be minimized if the project is supported from the outset by properly designed insurance and supported by a professional broker like L&G.
Failed claims are often not due to disaster, but due to lack of knowledge and assistance.
Don’t let administrative errors destroy your reputation and project’s viability.
🔹Contact L&G Insurance Broker Now
For free consultation regarding construction project insurance and EPC in the Bogor, Cianjur and surrounding areas:
📧 info@lngrisk.co.id
🌐 www.lngrisk.co.id
📞 (+62) 21-xxxx-xxxx
