China’s Heavy Equipment Invasion and Common Insurance Coverage Mistakes
The Indonesian heavy equipment market is currently being flooded with products from Chinese giants such as SANY, XCMG, Zoomlion, SDLG, Liugong, Shantui, Lovol, Lonking, Foton, XGMA, and Yutong.
Easy financing support, competitive prices, and easy spare parts availability make these brands the favorites in the mining, construction, and plantation sectors throughout Indonesia.
However, behind this success, there is one fatal mistake that continues to repeat itself: many heavy equipment owners take out insurance with cheap schemes without understanding the true risks.
Many companies choose policies based solely on price, often through personal agents or acquaintances. Unfortunately, without proper risk analysis, the policy only appears complete on paper—until claims are filed, and they end up being denied.
This is where PT Liberty and General Insurance Broker (L&G Insurance Broker) plays a vital role. As an independent and professional insurance broker, L&G ensures that every policy provides real protection—not just an administrative formality.
For over 20 years, L&G has been a trusted partner for hundreds of contractors, distributors and mining companies in Indonesia.
Our main tasks include:
- Analyzing heavy equipment risks in the field.
- Develop strong policy wording that is appropriate to project conditions.
- Negotiating the best premiums with insurance and reinsurance.
- Monitor the claims process until completion.
This article will reveal why cheap insurance schemes can actually destroy your business, and how L&G Insurance Broker can be the best protection against huge losses due to failed claims.
The Trapping Phenomenon of “Cheap Premiums”
In a tight business competition, many parties are trying to reduce costs — including insurance costs.
Some agents offer very low premiums with the lure of full coverage, when in fact the contents of the policy are full of traps.
For example:
- An excavator worth Rp 3 billion is only insured with a premium of Rp 2 million per year.
- The policy says “All Risk”, but actually only protects against fire and theft while stored in a warehouse.
- There are no important clauses such as Overturning, Operational Risk, Flood, or Landslide.
Everything seemed fine — until the tool rolled over in the field and the claim was immediately denied.
True Story: When Cheap Insurance Destroys Business
A Shantui heavy equipment distributor in Kalimantan was once tempted by a cheap premium offer from a local agent.
Without field surveys, without risk assessments, and without wording reviews, the policy is issued immediately.
Several months later, a bulldozer worth Rp 4.5 billion overturned in the mining area and was completely damaged.
The distributor filed a claim — but the result: it was rejected outright.
Reason for rejection:
- The risk of overturning is not listed in the policy.
- Work location was not reported at closing.
- There is no Operational Risk Extension.
In the end, the entire loss of more than IDR 5 billion had to be borne by the company itself.
Distributors lose tools, customers sue, and business relationships with manufacturers are damaged.
It all started with one mistake: choosing a policy based on price, not quality.
Why Cheap Premiums = Weak Protection
1. Low Premiums Mean Limited Coverage
Insurance premiums reflect the extent of the risks covered. If the rates are too low, it means many risks are not covered.
For example:
- The device is only protected when parked, not when operating.
- Risks such as impact, collision, landslide, flood, or subsidence are not covered.
As a result, when an incident occurs in the field, the insurance company rejects the claim because it is “not covered by the policy.”
2. Cheap Premiums, Weak Reinsurance
Any major heavy equipment claim usually involves an international reinsurance company.
However, insurers offering low premiums often do not place adequate reinsurance.
So when claims worth billions of rupiah are filed, their funds are insufficient — and the shortcut is to deny the claim.
3. Slow and Unprofessional Claims Process
Cheap policies usually don’t come with strong claims service.
The team handling the claims had little experience, was unresponsive, and even disappeared when the process became complicated.
Without the assistance of a professional broker, claims stop midway without results.
4. No Risk Survey
Healthy insurance always starts with a risk survey.
But in cheap schemes, this important stage is neglected.
Without a survey, insurance companies can reject claims on the grounds that “the equipment was previously damaged” or “the location does not comply with the policy.”
The Domino Effect of Cheap Insurance
The distribution chain of Chinese heavy equipment in Indonesia is very complex — from manufacturers, distributors, leasing, to end customers.
When one claim fails, the effects ripple out to all parties:
- Distributors Bear Their Own Losses
Unclaimed equipment failure disrupts cash flow and worsens financial reporting. - Leasing Facing Bad Debt
When the equipment breaks down and the claim fails, the customer stops paying the installments. As a result, the leasing company suffers significant losses. - Customers Lose Trust
Once a claim is paid in default, customers will switch to another brand or distributor. - Relations with Manufacturers in China Disturbed
The manufacturer considers the distributor to be unprofessional in protecting its products in the local market.
The Role of Insurance Brokers in Preventing Disasters
This is why smart companies never take out insurance on their own without a broker.
Brokers like L&G Insurance Broker not only sell policies, but act as risk advisors and your representatives before insurance and reinsurance companies.
1. Arrange a Policy According to the Real Risk
L&G understands the operational terrain of Chinese heavy equipment in Indonesia — from nickel mines in Sulawesi, dam projects in Sumatra, to road construction in Papua.
We ensure all risks are covered, including:
- Overturning, Impact, dan Collision
- Operational Use & Loading/Unloading
- Flood, Landslide, dan Subsidence
- Transit over Water
Everything is stated in a strong policy wording and can be claimed without any obstacles.
2. Negotiate a Reasonable but Safe Premium
L&G is not looking for the cheapest premium, but rather a premium that balances price and guarantee.
We make sure you don’t pay too much, but also don’t miss out on important protection.
3. Professional Claims Assistance
Heavy equipment claims can be worth billions of rupiah and are full of challenges.
L&G has an independent claims department with extensive experience in handling cases involving damaged, burned or sunken heavy equipment.
We represent clients in all negotiations with international insurance and reinsurance companies until the claim is paid in full.
4. Long-Term Relationships and Integrated Digital Systems
We didn’t stop at the police station.
L&G conducts annual reviews, provides technical training, and helps clients manage all policies through the LIGASYS digital system, so that every process can be monitored in real-time and transparently.
Conclusion: Cheap Today, Bad Tomorrow
Insurance is not a formality, but an investment to protect your business.
Cheap premiums may seem like a good deal at first, but when a claim is denied, the loss can double everything you saved.
Many Chinese heavy equipment companies in Indonesia have learned the hard way — claims fail not because they didn’t pay premiums, but because they bought the wrong policies.
💡 Remember:
“Cheap doesn’t mean safe. Insurance isn’t about price, it’s about real protection.”
Entrust your business protection to L&G Insurance Broker, an independent broker with a strong reputation in:
- Managing thousands of Chinese heavy equipment policies,
- Handled dozens of large claims with successful results,
- And become a major partner in the national mining, construction and infrastructure sectors.
L&G Insurance Broker – Protecting Assets, Maintaining Trust, and Saving Your Business.
HOTLINE L&G 24 JAM: 0811-8507-773(CALL – WHATSAPP – SMS)
Website: lngrisk.co.id
Email: halo@lngrisk.co.id
