A car showroom is more than just a place to showcase new vehicles. Behind its clear glass and aesthetically pleasing lighting, assets worth billions of rupiah are exposed daily to a variety of significant risks—from fires and floods to theft and even accidents during test drives. Many showroom owners believe their buildings appear safe and modern, dismissing the risks as merely a “small possibility.” Yet, a single incident could destroy a car inventory that has been built up over years.
In recent years, the trend of damage to showrooms in Indonesia has been increasing. Floods are increasingly unpredictable, car component theft is becoming more widespread, and fires caused by electrical short circuits are becoming real threats. Even more dangerous, most showrooms lack protection that truly aligns with their level of risk—whether in terms of coverage, extended coverage, or claims assistance.
Through this article, we will discuss deadly risks that can destroy a car showroom without warning, as well as reviewing the types of protection that every showroom owner must have to maintain the continuity of their business.
And if you want to ensure that every asset of your showroom is properly protected,L&G Insurance Brokerready to assist starting from risk analysis, determining the most appropriate policy, to professional and transparent claims assistance.
Why Are Car Showrooms a High-Risk Target?
Car showrooms have unique characteristics that make them much more vulnerable to various risks than typical commercial buildings. First, showrooms are designed with very open public access. Large glass doors, highly visible display areas, and the constant flow of customers make them more difficult to control from a security perspective than enclosed warehouses. Beneath their luxurious exterior, showrooms store a large number of highly valuable assets—from new cars to test-drives to vehicles awaiting delivery to customers.
Furthermore, showrooms are generally located in strategic locations such as along major highways, commercial districts, or high-traffic areas. While these locations are ideal for sales, they also increase the risk of external risks, such as vehicle accidents involving buildings, riots, and flooding due to inadequate drainage in densely populated areas.
Showrooms also rely heavily on the physical condition of the building, which serves as their primary display case. Extensive glass walls, decorative panels, spotlights, and open layouts make them vulnerable to damage from earthquakes, strong winds, or accidental impacts. This is not to mention internal risks such as electrical short circuits, overloaded air conditioning systems, and even human error when moving cars.
All these factors make the car showroom a high-risk property which requires proper and comprehensive insurance protection. Without serious preventive measures, major losses can occur at any time, even at even the most secure-looking showroom.
A Deadly Risk That Could Destroy a Car Showroom Without Warning
Car showrooms hold significant assets, so a single incident could result in billions of rupiah in losses within minutes. Here are the most critical risks to be aware of:
1. Sudden Fire Due to Electrical Short Circuit
Fire is a showroom’s greatest enemy. Many showrooms are filled with electrical equipment such as spotlights, large air conditioners, electric car chargers, and decorative electronic systems. If a short circuit occurs at one point, a fire can spread rapidly, engulfing dozens of cars at once. The building can also be completely damaged. Without proper protection, owners can lose their entire assets overnight.
2. Floods that Damage a Large Number of Car Units
Showrooms are often located in city centers, which are ironically prone to flooding. Just 30–50 cm of water is enough to damage a car’s ECU, interior, and electrical system—damage that is difficult to repair and often results in a total loss. In a major flood, showroom losses can reach hundreds of millions to billions of rupiah in a single incident.
3. Theft and Vandalism by Organized Perpetrators
Showrooms are easy targets for car thieves and high-value components (ECUs, airbag units, rims, and even electric car batteries). Crime can occur when showrooms lack nighttime security. The loss of even one unit can cause significant losses, especially if thefts are carried out in an organized manner and involve larger groups.
4. Damage Due to Test Drive
Test driving is a risky activity. Accidents can occur on public roads or in the area around the showroom. If a visitor causes damage to the car or hits someone else’s property, the showroom will be liable for significant costs.
5. External Risk: Vehicle Crashes into Showroom
Showrooms located on major roads are highly vulnerable to being hit by vehicles that lose control. Damage to the large glass structure and the cars on display could result in significant losses.
6. Natural Disasters: Earthquakes, Whirlwinds, and Landslides
Natural disasters often strike suddenly. For showrooms with predominantly glass structures, earthquakes and strong winds can cause significant damage to the building and the cars on display within.
These risks indicate that car showrooms are in a vulnerable zone. Without proper risk management and protection, the business could collapse suddenly.
Types of Insurance That Car Showrooms Must Have
To face the various risks that can arise without warning, car showrooms cannot simply rely on CCTV, security guards, and physical security systems. They need strong financial protection through the right insurance policy. The following are the ideal types of insurance for showroom owners:
1. Property All Risks (PAR) / Industrial All Risks (IAR)
This is the foundation of showroom protection. This policy protects the showroom building, interior, equipment, and supporting facilities from risks such as:
- Fire
- Explosion
- Floods and waterlogging (if expanded)
- Riots, civil commotion, and certain disasters (if extended)
With PAR/IAR, showroom owners not only protect their car stock, but also the entire infrastructure that is the face of the business.
2. Motor Vehicle Stock Insurance (Motor Vehicle – Stock / Dealer’s Open Cover)
Unlike regular vehicle insurance, this policy is specifically designed forunsold car stockin the showroom or in the storage area (stock yard).
Protection generally includes:
- Physical damage due to accidents, fires, floods
- Risks when units are moved between locations
- Damage during the display process or when entering or exiting the showroom
This policy is very important because the stock value can reach tens of billions of rupiah at one time.
3. Burglary / Theft Insurance
Showrooms store high-value items, so there is a risk of theft—either by outsiders or internal parties.insider—must be watched out for.
This insurance protects against:
- Theft with signs of violence or burglary
- Damage due to theft attempts (doors, glass, fences, etc.)
With this policy, losses due to theft of units or components can be minimized.
4. Public Liability Insurance
Showrooms are public spaces. Visitors could slip, be hit by glass doors, or experience injuries.injuryin the display area.
Public Liability protects the showroom from:
- Third party claim for damages due to bodily injury
- Damage to third party property that occurs in the showroom area
This is important to maintain reputation and avoid unexpected legal losses.
5. Insurance for Test Drive (Motor Insurance – Special Cover / Liability Extension)
Every test drive carries the risk of an accident. Therefore, it is necessary to:
- Protection against damage to the test drive car
- Protection against damage to third parties (other vehicles, public property)
This policy can be an extension of stock insurance or a separate policy with special provisions.
6. Fidelity Guarantee Insurance (Employee Fraud)
Risks don’t just come from outside. In some cases, financial leaks actually occur from within.
Fidelity Guarantee protects companies from financial losses due to:
- Embezzlement
- Fraud
- Abuse of authority by certain employees
For showrooms with large transaction flows and high-value stock, this protection is very relevant.
Conclusion
Car showrooms are essentially warehouses for high-value assets that are exposed to daily risks—from fires and floods to theft and even minor operational errors. A single incident can cause billions of rupiah in losses, halt sales, and damage customer relationships. Many showroom owners only realize the extent of the threat after a disaster strikes, when it’s too late.
In fact, with the right insurance protection, all of these significant risks can be mitigated. Insurance provides a safe haven for businesses to continue operating even in the worst-case scenario. It not only protects car inventory but also ensures business continuity, reputation, and financial stability.
This is where the role L&G Insurance Brokeris crucial. We don’t just help you choose a policy, but we thoroughly map your showroom’s risks, develop the most appropriate solutions, and assist you when a claim is filed. Strong protection isn’t about whether you need it, but about how prepared you are to safeguard your assets and the future of your business.
Before risks come without warning, make sure your showroom is well protected.Contact L&G Insurance Broker, and let us help keep your business safe under any circumstances.
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DON’T WASTE YOUR TIME AND SECURE YOUR FINANCES AND BUSINESS WITH THE RIGHT INSURANCE.
HOTLINE L&G 24 JAM: 0811-8507-773 (PHONE – WHATSAPP – SMS)
Website: lngrisk.co.id
Email: halo@lngrisk.co.id
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