In the transition to a green economy, renewable energy projects such as solar, wind, biomass, and geothermal power plants are becoming increasingly popular in Indonesia. The government is encouraging significant investment in this sector, while many private and foreign companies are developing environmentally friendly green infrastructure.
However, behind the spirit of sustainable development lies a significant risk that is often overlooked: the risk of legal liability to third parties. Accidents on project sites, unintentional environmental damage, or injuries to local residents can result in lawsuits worth billions of rupiah.
Here it is public liability insurance is a crucial component that every green energy project must have. This policy provides protection against legal claims resulting from bodily injury or property damage to third parties during the project.
Unfortunately, many project developers do not fully understand the difference between purchasing a policy directly from an insurance company, through an agent, or through a professional insurance broker such as L&G Insurance Broker. In fact, this decision could determine the fate of the project if a major claim arises.
Insurance brokers like L&G don’t just sell policies; they analyze your project’s risks, design the right protection structure, negotiate the best premiums with various insurance companies, and most importantly, accompany you until your claim is paid.
If you are planning a green energy project, solar power plant development, or sustainable infrastructure, don’t let legal risks stop you.
Contact L&G Insurance Broker for a free consultation via WhatsApp at 08118507773 or email to halo@lngrisk.co.id now.
Why Are Green Energy Projects Vulnerable to Legal Risks?
At first glance, renewable energy projects may seem safer because they don’t involve hazardous materials like coal or oil. However, in reality, these projects carry very real legal risks.
Imagine the following scenarios:
- Subcontractor workers were electrocuted in the solar panel installation area.
- A small explosion in the biogas area caused injuries to nearby residents.
- Wind turbine construction causes landslides that damage residents’ property.
- Geothermal pipe leaks cause environmental damage.
- An operational project vehicle crashed into a resident’s house near the construction site.
Any of the above incidents could trigger lawsuits against the project’s developer or main contractor. Without public liability protection, the company would bear the costs of compensation and legal fees directly, potentially amounting to billions of rupiah.
Functions and Benefits of Public Liability for Green Energy Projects
Public liability insurance is designed to provide comprehensive protection against third-party lawsuits arising from project activities. For green energy projects, its role is even more strategic because it concerns the environment and local communities.
Here are some of the main benefits:
- Protection against Third Party Injury
If workers, guests, or local residents are injured as a result of project activities, this policy covers medical and legal compensation costs.
- Compensation for Property Damage
For example, if a resident’s land cracks due to vibrations from construction, or a resident’s house is damaged by project activities, public liability covers reasonable compensation costs.
- Covering Attorney and Court Fees
Legal proceedings can be lengthy and expensive. This policy covers legal fees, attorney fees, investigation fees, and dispute resolution.
- Increase Investor and Financial Institution Confidence
International investors typically require proof of an active liability policy before disbursing funds. This is an indicator that the project is professionally managed.
- Maintaining Project Reputation and Image
An uninsured accident can destroy the reputation of an environmentally friendly project. This policy protects the company’s image and maintains public trust.
Relevance Public Liability with Sustainable Development Goals (SDGs)
Sustainable development is not just about green energy, but also about social and legal responsibility towards people and the environment. In the context of the Sustainable Development Goals (SDGs), public liability insurance directly contributes to several objectives, such as:
- SDG 8:Decent work and economic growth — through guaranteed workplace safety.
- SDG 11:Sustainable cities and communities — because projects don’t burden surrounding communities with risks.
- SDG 13:Addressing climate change — by ensuring environmental risk mitigation in the project area.
So, having public liability insurance is not only about complying with regulations, but also part of moral and social responsibility in sustainable business practices.
Case Study: When Green Energy Isn’t So “Green”
An energy company in Southeast Asia faced a major lawsuit after its wind power plant (PLTB) project caused damage to farmland near the turbines. Vibrations and noise drastically reduced farmers’ crop yields.
As a result, dozens of residents sued the company for negligence in risk mitigation, with the lawsuit valued at USD 2 million.
The company didn’t have public liability insurance, believing the “green” project posed less risk. The result? A six-month project delay, spiraling legal costs, and a tarnished reputation among investors.
Compare this to other companies that use brokers, such as L&G Insurance Broker, where a public liability policy is prepared from the outset of a project, complete with a risk assessment and extension coverage that covers environmental risks. When a claim arises, the broker immediately assists in preparing the report and negotiating until the insurance company covers all compensation costs.
This is concrete evidence that the role of a broker is not just a policy seller, but a guardian of project continuity.
The Vital Role of Insurance Brokers in Green Energy Projects
Maybe you’re thinking: “Then I can just buy a policy directly from the insurance company, right?”
The answer: very risky.
Why? Because:
- Agents only represent one insurance company.They can’t compare products or ensure the best protection for you.
- Insurance companies cannot be neutral in the claims process.They are the party who must pay the claim, so their position is opposite to that of the insured.
- Insurance brokers, such as L&G, act independently and on your full side.
L&G will assist you from the start of your project, from technical risk analysis and selecting appropriate policy wording to negotiating premiums with major insurance companies in Indonesia and abroad.
And when a claim occurs, the L&G team will accompany you from the reporting stage and investigation until the claim is actually disbursed.
So, if you think insurance is just a formality, it’s time to change that mindset. In large projects like green energy, insurance brokers are a strategic part of risk management.
How Does L&G Insurance Broker Help Green Energy Projects?
As an insurance broker with over two decades of experience in the construction and energy sectors, L&G Insurance Broker understands the complexities of risk in sustainable projects.
Here’s the approach the L&G team took:
- Risk Identification & Mapping
Analyze specific risks in each phase of the project, from pre-construction, installation, to operation. - Policy Customization
Design a public liability policy that suits the project characteristics, including cross liability and environmental liability extension. - Premium Negotiation
Negotiating the best premiums to various national and international insurance companies. - Claim Management
When a claim occurs, L&G prepares all documents, communicates directly with the insurer, and ensures a fair and prompt settlement.
With the support of a team of technical, legal, and insurance experts, L&G is a trusted risk partner for various green energy projects in Indonesia.
Why is Public Liability Insurance Necessary from the Early Stages of a Project?
Many companies only apply for liability policies once a project is already underway. However, risks can arise even during the preparation stages, such as site surveys, soil testing, and heavy equipment mobilization.
A small incident early on could lead to a major claim. Therefore, a public liability policy should be in place from the start of the project.
Brokers like L&G will help determine the policy’s effective period, limit of liability, and geographic coverage appropriate to the project location.
Additional Protection That Can Be Linked to Public Liability
For large-scale green energy projects, public liability policies are usually combined with other insurance policies such as:
- Contractor’s All Risks (CAR):protect the project structure during construction.
- Professional Indemnity:protect design or engineering consultants from professional misconduct.
- Environmental Liability:provide special protection against environmental pollution.
All of this can be arranged in an integrated manner through an insurance broker, rather than through an agent who only focuses on selling a single product.
Conclusion
Renewable energy development and sustainable projects are the future of the industry. But despite the good intentions of protecting the planet, there are legal and financial risks that should not be ignored.
Public liability insurance is the main shield that protects your company from third-party lawsuits, maintains project continuity, and ensures your reputation remains intact in the eyes of investors and the public.
However, it is important to remember:
Never buy insurance directly from an insurance company or through an agent.
In the event of a claim, only insurance brokers such as L&G Insurance Broker which can really help you until the claim is disbursed.
So before your project starts, make sure the protection is complete.
Consult your needs now for FREE via WhatsApp at 08118507773 or email to halo@lngrisk.co.id.
Because in the world of green energy projects, protection is not just about assets but about responsibility and sustainability.
