Hello, friend Liga Asuransi The recent extreme weather shouldn’t be underestimated. Heavy rains in various parts of Indonesia have caused extensive flooding, damaging homes, vehicles, warehouses, and even businesses. Unfortunately, many asset owners don’t realize the importance of having proper protection before disaster strikes.
Through this article, we want to help you understand the major risks posed by floods and how flood insurance and support from insurance broker professionals like L&G Insurance Broker can be an effective asset protection solution. Let’s find out more!
The Real Impact of Floods on Physical Assets
Floods not only inundate roads and residential areas, but also destroy various valuable assets. According to BNPB data, annual flood losses reach trillions of rupiah. Homes, private cars, inventory, and even production machinery are among the victims.
Apart from physical damage, the further impacts of flooding can include:
- Business operations stopped
- Obstruction Product delivery
- Disturbed Service to customers
- Loss of important data and legal documents
Without adequate protection, all these losses must be borne solely. Even in the banking and financial institutions sector, floods can cause system disruptions and disrupt customer services. Similarly, in the healthcare sector, service facilities such as hospitals and clinics can experience operational disruptions if they lack disaster insurance.
Types of Assets Vulnerable to Flooding
The following is a list of assets that are highly vulnerable to flood damage and should be insured immediately:
- Property
From homes and shophouses to offices and even high-rise buildings, flooding can damage building structures and electrical installations, causing significant losses if uninsured. Floodwaters also carry mud and debris, which can increase post-disaster cleanup and repair costs.
- Stock of Goods in the Warehouse
Finished goods, raw materials, or stored electronic products can be completely damaged by flooding. Without property insurance, the losses could reach hundreds of millions or even billions of rupiah. Especially if the goods are part of a national distribution network, this damage could impact the entire supply chain.
- Motor vehicle
Private cars, operational vehicles, and even logistics trucks can become completely disabled if submerged in floodwater. Water can enter the engine compartment and electrical system, causing extensive damage that is very expensive to repair. The solution is…vehicle insurance with flood risk extension which provides reimbursement for repair or replacement costs of the unit.
- Production Machinery and Equipment
Printing machines, heavy equipment, and automated production systems are high-value assets that must be insured to protect them from water damage. If these machines are unable to operate, the entire business can be paralyzed and result in further losses.
- Electronic Devices and Important Documents
Computers, servers, and legal files often escape protection, yet they are highly vulnerable to water. Water can damage hard drives, data storage devices, and even irreplaceable documents. Insurance can be extremely helpful in recovering from such damage or loss.
Flood Risk Based on Business Type & Protection Recommendations
- Warehouse and Distribution Owners
- Risk: Damaged stock, disrupted supply
- Recommendation: Property All Risk + Business Interruption
- Explanation: Warehouses are often located in industrial areas prone to flooding. Comprehensive policy protection is essential, including coverage against logistics and distribution disruptions.
- MSMEs (Shops, Workshops, Laundry, Food Stalls)
- Risk: Damaged work tools, lost turnover
- Recommendation: Micro Business Insurance, with flood guarantee
- Explanation: MSMEs face limited capital and limited access to rapid recovery. Microinsurance provides financial peace of mind when business premises are flooded and equipment is rendered unusable.
- Developers and Property Owners
- Risk: Unit damaged, buyer delays
- Recommendation: Property All Risk, Contractor’s All Risk(if still under construction)
- Explanation: Property projects under construction are highly vulnerable to extreme weather. Construction insurance can cover the costs of structural damage, heavy equipment damage, and even work delays.
- Vehicle Owner
- Risk: Engine & interior damage
- Recommendation: Flood extension vehicle insurance from trusted brokers
- Explanation: Many vehicle owners are unaware that flood risk must be specifically included in their policy. Ensure this clause is active.
- Office and Building Management
- Risk: Operational disruption
- Recommendation: Industrial All Risk + Electronic Equipment Insurance
- Explanation: Office buildings have complex electronic systems that are vulnerable to water damage, such as servers, elevators, security systems, and electrical networks.
Types of Insurance that Provide Flood Protection
Not all insurance policies automatically cover flood risks. Therefore, you need to understand and choose the following types of insurance:
- Property All Risk / Industrial All Risk
Protects the building and its contents from various risks, including flooding (if extended). It is important to ensure that a flood clause is explicitly included in the policy.
- Vehicle Insurance with Flood Risk Extension
This is generally optional and must be added separately. Don’t wait until your car is submerged! This extension provides comprehensive reimbursement for damage caused by flooding.
- Cargo & Stock Insurance
Ensures that goods stored or being shipped remain safe from water risks. Ideal for logistics and e-commerce businesses with high shipping volumes.
- Business Interruption Insurance
Covers potential financial losses resulting from business interruption due to a disaster. This coverage can be a cash flow saver while your business is out of action.
- Engineering Insurance (CAR, EAR, CPM)
Ideal for construction and heavy industrial projects with high-risk equipment, this insurance can protect project assets from damage caused by extreme weather, including floods and landslides.
The Important Role of Insurance Brokers in Protecting Assets from Floods
Purchasing an insurance policy directly doesn’t always guarantee maximum protection. This is where the importance of having a representative comes in as an insurance broker professional.
Benefits of Using an Insurance Broker:
- Risk analysis of location and asset type
- Selection of the most appropriate and efficient police
- Ensure flood risk expansion is included in the clause
- Assistance during the claims process, including documentation and negotiation
L&G Insurance Brokers have experience handling flooding cases ranging from residential to large-scale industries. We understand your needs and are ready to provide the right solutions with professional and personalized service insurance brokers. Trusted, we prioritize your interests, not insurance companies.
FAQ – Frequently Asked Questions
- Do all policies cover flood risk?
Nope. Need a specific extension in your policy. - Are new vehicles automatically flood protected?
Not necessarily. Depends on the type of police and extension you take. - How long does the claims process take if a flood occurs?
If accompanied by an insurance broker, the claims process can be faster and more accurate. - Can MSMEs get flood protection?
Yes, we can. There are even special packages available for small businesses. - Why should you use a broker, rather than going directly to the insurance company?
Brokers work for your interests, not the insurance company’s. They are more neutral and strategic.
Conclusion
Floods are more than just a weather event; they pose a serious threat to homes, vehicles, businesses, and other assets. When heavy rains are unpredictable, the only wise course of action is to protect assets early with the right protection solutions.
With flood insurance tailored to your needs, various losses can be minimized, or even replaced. However, to ensure optimal protection, the role of a professional insurance broker becomes very crucial.
L&G Insurance Broker We are your reliable partner in protecting your assets from flood risk, from risk consultation and policy selection to claims assistance. Don’t wait for a loss to occur to act.
If you would like to know more about flood insurance protection, or would like to check whether your assets are properly protected, please consult with our team for a free consultation at 0811-850-7773 You’ll receive guidance and recommendations on the best insurance policies tailored to your needs and risk profile.
