L&G Insurance Broker’s Important Role for China’s Heavy Equipment Industry in Indonesia
The Indonesian heavy equipment market is currently saturated with Chinese-made products such as XCMG, SANY, Zoomlion, SDLG, Liugong, Shantui, Lovol, Lonking, and others. These brands dominate various infrastructure, mining, plantation, and energy projects. Most Chinese heavy equipment distributors and manufacturers in Indonesia sell their products through direct credit schemes.
However, behind this aggressive and profitable sales strategy, there are major risks that could shake their financial stability — the risk of equipment loss, default, and insurance claim rejection.
This is where PT Liberty and General Insurance Broker (L&G Insurance Broker) plays a crucial role. As a professional insurance broker officially licensed by the Financial Services Authority (OJK), L&G has experience insuring thousands of Chinese-made heavy equipment units on major projects throughout Indonesia, as well as resolving dozens of large claims with satisfactory results for clients.
L&G acts not simply as an intermediary, but as a risk advisor and technical negotiator, ensuring that each insurance policy is properly structured, covers all relevant risks, and is paid out promptly when a claim occurs.
How China’s Heavy Equipment Credit Sales Work in Indonesia
Most Chinese heavy equipment manufacturers such as SANY Heavy Industry, XCMG Group, and Zoomlion have established their own financing units — such as SANY Finance or partnered with local financial institutions — to expand their market in Indonesia.
The scheme is simple but high risk:
- Customers purchase heavy equipment with a small down payment (10–20%).
- The remaining value of the equipment is paid in installments over 1–3 years.
- Ownership of the equipment remains under financing until payment is complete.
In this situation, the heavy equipment is actually still an asset of the financing company or distributor, so it must be protected by Comprehensive Heavy Equipment Insurance — covering the risks of loss, fire, accident, theft, flood, and others.
Main Problem: Insurance Claims Are Often Denied
Unfortunately, many Chinese heavy equipment companies in Indonesia have suffered huge losses because their insurance claims were not paid.
The cases are often similar:
- Insurance is handled directly or through private agents without adequate technical understanding.
- The policy was drafted haphazardly without considering important clauses such as waiver of subrogation, automatic reinstatement, new replacement value, or breach of warranty.
- Premiums are kept as low as possible, so insurance companies reject large claims on the grounds of hidden exceptions in the terms and conditions (TC).
- Large claims require reinsurance approval, while small agents lack the bargaining power to pressure insurance companies or bridge communications with foreign reinsurers.
The result?
Heavy equipment worth billions of rupiah was lost or damaged without compensation. Distributors suffered significant losses, financing was delayed, and the reputation of Chinese brands was tarnished.
Real Case Example (Illustrative)
A Chinese heavy equipment distributor company in Kalimantan sold 30 XCMG excavators to a local mining contractor with a 3-year credit scheme.
All units are insured through “agents or friends” with low premiums.
Several months later, five excavators sank in the mining area due to a landslide. When a claim was filed, the insurance company denied it, citing:
- There is no all-risk policy (only fire and theft).
- There is no evidence of equipment inspection.
- Work location is not listed in the policy.
Losses of over Rp 12 billion had to be borne solely. Bad debts had fallen through. Their business was on the verge of bankruptcy.
Why Does This Happen?
The main problem is not with the insurance, but with how to manage and place the policy.
Many Chinese heavy equipment companies entrust insurance matters to sales staff or individual agents without technical expertise. They don’t understand:
- Complex insurance contract language (wording).
- Claim procedures and proof of loss.
- Terms and clauses that are often hidden in standard policies.
- International reinsurance relationships that determine the approval of large claims.
On the other hand, insurance companies will not easily pay large claims if there is no professional broker who can advocate the claim technically and legally.
Financial Impact on Chinese Distributors
The losses resulting from mismanagement of insurance can be fatal:
- Direct losses: loss of equipment worth billions of rupiah.
- Indirect losses: bad debts, damaged reputation, loss of customers, and disruption of cash flow.
- Long-term losses: loss of trust from principals in China and international financing institutions.
For finance companies like SANY Finance or XCMG Leasing, the loss of assets without compensation can immediately shake financial statements and worsen the NPL (Non-Performing Loan) ratio.
Solution: Use a Professional Insurance Broker like L&G
Amid the complexity of the Indonesian market, Chinese heavy equipment companies should not bear the risks alone.
L&G Insurance Broker offers a comprehensive solution that includes:
- Complete Risk Analysis
Assess the risk profile of each project, location, and type of heavy equipment to determine the most appropriate type of insurance. - Optimal Insurance Program Design
Drafting policies with the right clauses, negotiating the best terms and premiums with national and international insurance companies. - Technical and Legal Claims Assistance
When a claim occurs, L&G acts as the client’s representative before the insurance company, preparing documents, conducting technical negotiations, and finalizing the claim payment. - Global Reinsurance Connection
With extensive reinsurance relationships, L&G is able to secure financial support from the international insurance market for large-value claims. - Periodic Reporting and Monitoring
Internal digital systemSICKallows clients to monitor policy status, premiums, and claims in real-time — transparently and efficiently.
L&G Insurance Broker Advantages
- More than 30 years of experience in heavy equipment, construction, energy and mining insurance.
- Has handled more than 2,000 units of Chinese heavy equipment with an insured value of hundreds of millions of US dollars.
- Good reputation among national and global insurance companies.
- A team of technical and legal experts who understand the details of heavy industry contracts and risks.
- Registered and supervised by the Financial Services Authority (OJK), ensuring the legitimacy and integrity of the service.
Conclusion: Protect Your Business Before It’s Too Late
For Chinese heavy equipment companies in Indonesia — whether SANY, XCMG, Zoomlion, SDLG, Liugong, Shantui, Lovol, or others — insurance is not just a formality, but the heart of your business’s financial defense.
Credit sales without strong insurance protection are a ticking time bomb. A declined claim could destroy your entire business network in a single incident.
With L&G Insurance Broker, you get comprehensive protection, contract clarity, and certainty of claims payment.
We are not just a broker — we are a strategic risk partner for the Chinese heavy equipment industry in Indonesia.
