In early 2024, Singapore-based BrightWorks Technology, a precision electronics company, opened a new facility in the Batamindo industrial area. With SMT, CNC, and automated assembly lines worth over Rp 120 billion, they are optimistic about expanding their market reach into Indonesia and Southeast Asia.
But three months into operation, a small incident had a big effect:
- Panel control overheat
- A small spark ignites a fire
- High voltage cable caught fire
- Main engine stopped completely
- Production stops for 21 days
- A USD 1.4 million export contract is in danger of failing.
When a claim was submitted to the Singapore insurance company they had previously used, the response they received shocked the entire team:
“We cannot pay claims for assets located in Indonesia. Indonesian regulations require the use of insurance licensed by the Financial Services Authority (OJK).
Claim rejected. Losses are borne by yourself.
Eventually, they contacted L&G Insurance Broker, an Indonesian broker with experience dealing with Singaporean companies. L&G then:
- Reorganize the entire policy using an Indonesian insurer
- Adding Business Interruption (BI)
- Conduct risk surveys and make recommendations for improvements
- Arranging reinsurance to Munich Re and SCOR Singapore
- Ensure all protection complies with OJK
Within two weeks, the entire BrightWorks facility was properly protected.
This story is just one of hundreds of real-life incidents experienced by Singaporean businesses in Batam and the Riau Islands.
1. First Risk: Fire Risk – The Biggest Threat to Factories & Warehouses
Batam has a high fire risk record, especially in the electronics, logistics, and cold chain sectors.
Common causes:
- electrical short circuit
- cable overload
- engine overheating
- poorly maintained electrical panel
- human error
- flammable material
Impact of fire:
- million dollar engine damage
- production downtime
- loss of export contracts
- third party risk of loss
- structural repair costs
Insurance solutions:
Property All Risks (PAR) / Industrial All Risks (IAR)
- Business Interruption (BI)
- Machinery Breakdown (if there is an expensive machine)
Why choose Indonesian insurance?
Because OJK regulations require all assets in Indonesia to be guaranteed by Indonesian insurance companies.
Singapore policies are invalid and claims can be rejected as in the BrightWorks case.
2. Second Risk: Damage to High-Value Imported Machinery
Singaporean investors in Batam usually bring high-tech machines:
- SMT line
- CNC 5-axis
- compressor industrial
robotic arm - chiller
- boiler steam
- laser cutting machine
Even a small failure can cause long downtime.
Cause of damage:
- voltage fluctuation
- short circuit
- bearing failure
- human error
- internal electronic failure
Solution:
Machinery Breakdown (MB)
- Machinery Loss of Profit (MLOP)
- Spare Part Import Coverage
Peran L&G:
- Assessing mechanical risks
- Designing a suitable MB policy
- Placed reinsurance to Swiss Re / Munich Re
3. Third Risk: Damage to Imported Goods (Marine Cargo Risk)
Most Singaporean companies in Batam import:
- machine
- spare parts
- electronic
- chemical
- construction materials
The risks:
- damage during loading/unloading
- forklift fell
- container tumble
- mishandling at the port of Singapore / Batam
- water ingress due to bad weather
- lost or stolen items
Solution:
Marine Cargo All Risks – Door to Door
With L&G, many clients get:
- complete all-risks policy
- fast claim
- protection during transit Singapore → Batam
4. Fourth Risk: Construction Project Accidents (Project Risk)
Singapore investors are building a lot:
- warehouse
- factory
- cold storage
- workshop
- data center
- shipyard facility
High project risks, such as:
- crane collapse
- scaffolding collapsed
- steelworks failed
- leak during tank installation
- worker accidents
Solution:
- Contractor All Risks (CAR)
- Erection All Risks (EAR)
- Third Party Liability (TPL)
- Delay in Start Up (DSU)
Peran L&G:
- Analyzing EPC contracts
- Designing protection according to risk
- Regulating international reinsurance
- Monitor claims in the event of an accident
5. Fifth Risk: Legal Liability (Liability & Legal Risk)
Singaporean companies often forget that Indonesia has different liability laws.
Liability risk:
- injured company guest
- vendor damaged goods/equipment
- the fire spread to neighboring properties
- water/air pollution
- contractor accident
Solution:
- Public Liability Insurance
- Employer’s Liability
- Product Liability
Why is it important?
Because third-party accidents often result in expensive lawsuits.
Important Part: All of This Insurance Must Be from Indonesia, Not Singapore
Based on Indonesian regulations:
📌1. POJK No. 23/POJK.05/2015 – Article 36
Every insured object in Indonesia is required to use an insurance company licensed by the OJK.
📌2. Law No. 40 of 2014
Prohibiting foreign insurance companies from guaranteeing objects in Indonesia.
📌3. OJK Circular Letter No. SE-06/D.05/2013
Prohibit the use of foreign police for domestic assets.
📌4. PP No. 14 of 2016
Foreign investors are required to comply with national regulations.
Conclusion:
❌Singapore police are illegal
❌Claims may be rejected
✔Mandatory insurance in Indonesia
✔Indonesian broker is the legal representative of the insured
The Role of Indonesian Insurance Brokers in Protecting Singaporean Businesses
Broker = business representative, not insurer representative.
Broker duties:
- Risk assessment
- Complete policy design
- Premium negotiation
- Negotiating policy wording
- Monitoring claims
- Risk mitigation analysis
- Monitoring renewal
- OJK Compliance
L&G understands exactly how Singaporean companies operate and their risks in Batam.
Why L&G Insurance Broker is the Top Choice for Singaporean Entrepreneurs
Main reasons:
⭐Decades of experience
⭐Many Singaporean clients in Batam–Bintan–Karimun
⭐Expert in industrial risk & EPC
⭐The most aggressive claims negotiator
⭐International reinsurance (Munich Re, SCOR Singapore, Swiss Re)
⭐Bilingual services (Indonesian–English)
⭐Professional documentation
⭐Very understanding of OJK regulations
L&G is not just a broker, but a strategic risk management partner for Singapore investors.
Conclusion – 5 Big Risks, 1 Sure Solution
In short:
✔High fire risk
✔Imported machines are easily damaged
✔Imported goods are prone to accidents
✔Construction projects are very risky
✔Liability is expensive.
And all Singapore businesses in Batam can only be protected through:
✔Indonesian Insurance
✔Indonesian Broker
✔International reinsurance
✔L&G Experience
If you are a Singaporean entrepreneur or investor who has a business, asset, warehouse, factory or project in Batam, Bintan or the Riau Islands:
Don’t let big risks threaten your business.
Contact L&G Insurance Broker today.
We provide:
✓Free risk analysis
✓Free policy review
✓Professional insurance program design
✓Claim assistance until completion
Protect your investment with proper and legal guarantees.
Disclaimer
This article provides general information regarding the key risks of Singaporean businesses in Batam and the importance of following Indonesian insurance regulations. This information is not intended as legal advice. Any decisions regarding insurance programs, risk management, or OJK compliance should be made in consultation with a licensed broker or professional advisor. Regulations are subject to change at any time in accordance with the policies of the Indonesian government and OJK.
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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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