On a quiet morning in the Cikarang industrial area, Mr. Liang A Taiwanese businessman received a heart-stopping phone call. His electronics factory, which had only been operating for two years, had experienced an electrical short circuit, causing a fire on one of the production lines.
The losses are not yet great, but there are much more serious problems:
insurance claim rejected.
The reason is simple but very fatal:
The policy he bought does not coverRSMD/CC(damage due to short circuit).
“How is that possible?” he thought. He paid tens of millions in premiums, but when he needed them most, his policy didn’t work.
This kind of situation is common among foreign entrepreneurs, including Taiwanese, when conducting business in Indonesia. This is the starting point for why discussing asset, project, and liability insurance coverage is so crucial for Taiwanese investors.
Indonesia: Big Opportunities, Big Risks
Indonesia is a paradise of opportunities for Taiwanese companies:
- Electronics & components industry
- Manufacturing (plastics, textiles, food)
- Renewable energy
- Industrial property
- Logistics & export-import
- Infrastructure and EPC
However, behind these opportunities lie significant risks that should not be underestimated. These risks differ even from those encountered in Taiwan, primarily due to Indonesia’s geography, infrastructure, and operational characteristics.
Key Risks Faced by Taiwanese Entrepreneurs Based on Industry Type
The following is a summary of the most critical risks, which will be the backbone in determining the type of insurance you must have.
- Electronics & Components Industry
Examples: PCB factories, computer components, electronic modules.
Typical Risks:
- Fire due to high voltage in SMT machine
- RSMD/CC (short circuit damage)
- Engine failure pick & place
- High humidity damages microchips
- Cyber disruption of automated systems
- Power supply disruption (downtime)
Mandatory Insurance:
- Property All Risks
- Machinery Breakdown
- Business Interruption
- Cyber Insurance
- Manufacturing Industry (Textiles, Plastics, Metals, Food)
Risk:
- Engine overheating
- warehouse fire
- Theft of raw materials
- Product contamination
- Work accident
- Consumer claims (product liability)
Mandatory Insurance:
- Property All Risks
- Industrial All Risks
- Public Liability
- Product Liability
- Infrastructure & Construction Projects
Taiwanese companies are heavily involved in the development of:
- new factory,
- EPC projects,
- renewable energy facilities,
- warehouse construction.
The risks:
- Structural failure
- Material damaged during installation
- Force majeure (strong winds, lightning, floods)
- Worker accident
- Third party claims
Mandatory Insurance:
- CAR/EAR (Construction/Erection All Risks)
- Third Party Liability
- Contractor Plant & Machinery (CPM)
- Logistics & Export-Import
Key risks for Taiwanese trading companies:
- Item damaged during shipping
- Truck overturned
- Theft or loss
- Delay in transit
- Force Majeure at Ports
Mandatory Insurance:
- Marine Cargo Insurance
- Stock Throughput Insurance (STP)
- Renewable Energy Industry (solar panels, biomass, turbines)
Risk:
- Inverter damage
- Lightning & power surge
- Mechanical turbine damage
- Fire due to overheating
Mandatory Insurance:
- Property All Risks
- Machinery Breakdown
- Public Liability
- Technology & Startups
Modern risk:
- Data leak
- Ransomware attack
- Professional errors (programmer / consultant)
- Violation of privacy
Mandatory Insurance:
- Cyber Liability
- Professional Indemnity (PI)
The Big Challenge: Choosing the Best Insurance from 70 Companies in Indonesia
In Indonesia, there are approximately 70 insurance companies. However, not all of them:
- has a large capacity,
- able to handle industrial risks,
- understand the needs of Taiwanese corporations,
- or supported by strong reinsurance.
Some companies are only strong at:
- property, or
- liability, or
- marine cargo, or
- construction.
There isn’t any one-size-fits-all.
The main problems of Taiwanese entrepreneurs:
- It is difficult to distinguish a truly competent insurance company.
- Many policy wordings are open to multiple interpretations → reasons for claims being rejected.
- Differences in underwriting provisions between companies.
- Not understanding the reinsurance aspect, even though this is crucial for major risks.
This is the reason Indonesian regulators require the use of brokers for foreign companies.
Indonesian Government Regulations Regarding Insurance (Taiwanese Investors Must Know)
The following regulations must be included in the article:
- Law No. 40 of 2014 concerning Insurance
Regulating insurance business activities & protection of the insured must use an insurance company registered in Indonesia.
- BOYNo.69/POJK.05/2016
About the implementation of insurance business.
- POJK No. 23/POJK.05/2015
About insurance products, consumer protection, and marketing.
- POJK No. 2/POJK.05/2017
About licensing of insurance brokerage companies.
Broker = representative of the insured, not an insurance company representative.
- POJK No. 33/POJK.05/2018
About the principle of prudence & governance.
Why Are Taiwanese Entrepreneurs Required to Use Brokers?
This regulation was issued because:
Many foreign companies (including Taiwanese) complain about the difficulty of claims.
Common problems:
- wording does not match,
- the exception conditions are too broad,
- no negotiation,
- placement is not appropriate to the risk,
- no representation at time of claim.
Therefore, OJK stipulates:
The insurance broker is the sole party responsible for representing the Insured.
Insurance Broker Duties for Taiwanese Entrepreneurs
This is what professional brokers like L&G do:
- Risk Survey and Risk Analysis
Studying factories, projects, logistics flow, safety SOPs.
- Designing an Efficient Insurance Program
Determine the policy type, limits, conditions, and additional clauses.
- Apply to the 5–10 Best Insurance Companies
Filtered by:
- capacity
- rating
- industry experience
- reinsurance support
- Premium Negotiation & Policy Wording
It is very important that the claim goes smoothly.
- Prepare an Insurance Placement Slip
Official document used for finalization of placement.
- Accompanying Audits from Banks, Lenders, and OJK
Especially for large projects.
- Claim Advocacy
Brokers act as the client’s advocate from the beginning to the payment of the claim.
Real Case Example (Using Pseudonym)
Case 1 – Taiwan Electronics Factory “Formosa Tech Manufacturing”
Location: Karawang
Asset value: Rp. 750 billion
Problem:
- There was a power outage
- SMT machine damage worth Rp. 12 billion
- Claim rejected because electrical troubles not included in the police
Reason:
- Police bought directly without brokers
- There are no “RSMD/CC” and “MB + BI” extensions
After joining L&G:
- The program has been completely overhauled.
- MB + BI limitexpanded
- In the next incident,claim paid 100%
Case 2 – Taiwan “Eastern Green Solar Energy” Factory Construction Project
Project value: Rp 1.9 trillion
Problem:
- Panel module damaged during unloading
- One part was hit by a forklift
- Initial claims are disputed
With the support of L&G:
- Placements were made to 11 insurance companies + Swiss Re
- Complete documents prepared
- Claim finally paid 95%
Why Taiwanese Entrepreneurs Should Choose L&G Insurance Broker
L&G has a strong track record of serving clients from various countries:
- Malaysia
- Singapore
- China
- India
- Japan
- Korea
- Europe
- and Taiwan
L&G Advantages:
- Over 30 years of experience
- Experts in construction, manufacturing, energy, logistics risks
- Supported by LIGASYS digital system
- Known as a broker capable of resolving complex claims
In addition, L&G is known to be very strong in:
- Wording arrangement
- Large project placement
- Premium optimization
- Claims assistance
Conclusion & Call to Action
Taiwanese businesses are growing rapidly in Indonesia, but the risks in Indonesia shouldn’t be underestimated. From factory fires and machinery breakdowns to supply disruptions and third-party lawsuits, all of these can result in billions of rupiah in losses.
Taiwanese investors need:
- The right insurance program
- Brokers who favor
- International standard protection
- Wording that is arranged correctly
- Professional claims assistance
With the right approach and the support of a trusted broker like L&G Insurance Broker, every Taiwanese entrepreneur can run a business in Indonesia more safely, efficiently, and securely.protected.
This article is intended for general educational purposes regarding business risks and insurance coverage for Taiwanese entrepreneurs in Indonesia. All names of companies, individuals, and cases mentioned are pseudonyms or illustrative examples not related to real identities or events, in order to comply with privacy and regulatory requirements, including the Indonesian Electronic Information and Transactions Law (UU ITE). The information in this article should not be construed as legal advice or a final decision on insurance placement. For professional recommendations tailored to your company’s specific needs, it is recommended to consult directly with a licensed insurance broker such as L&G Insurance Broker.
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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
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