Do you own a furniture store or a furniture factory? If so, you’re likely aware that furniture inventory is more than just merchandise. Luxury sofas, teak dining tables, ergonomic office chairs, and even wardrobes are all high-value assets that require extra attention.
The problem is, furniture inventory is one of the most vulnerable assets. Even minor damage can drastically reduce its resale value. For example, a slightly torn leather sofa can no longer be sold at its normal price. A wooden cabinet exposed to moisture can develop mold and become unattractive to consumers. This is not to mention serious threats such as floods, fires, or theft.
In Indonesia, many furniture businesses still take inventory management lightly. Yet, one small mistake can lead to significant losses. For example, a warehouse owner in Jepara suffered losses exceeding Rp 3 billion when his warehouse was flooded in 2022. There was no protection or compensation; the entire loss was borne solely by the owner.
In this article, we’ll thoroughly discuss how to safely store high-value furniture inventory. This includes why furniture inventory requires special protection, the risks involved, practical warehouse storage tips, and how furniture stock insurance could be the savior of your business.
And of course, we will introduce the role of L&G Insurance Broker, a trusted partner ready to help you find the best insurance solutions. With over 30 years of experience in the industry, L&G is here not only to sell policies but also to support claims through to resolution.
Don’t wait until major losses hit your business. You can get a free consultation now via WhatsApp at 08118507773 or email halo@lngrisk.co.id.
Why Does Furniture Stock Need Special Protection?
Furniture = High Value Asset
Furniture isn’t a disposable item. Raw materials like teak, mahogany, or oak can be very expensive. The production process is also complex, from cutting and drying to assembly and finishing. All of this contributes to the high resale value of furniture, even for a single piece.
Storage Challenges
The furniture is large and heavy. A three-door wardrobe can weigh over 100 kg. Misplaced items can fall, crack, or bend. Unlike clothes, which can be folded and stored tightly, furniture requires ample space and proper arrangement.
Impact of Loss
- 1 damaged luxury leather sofa = loss of Rp. 15–20 million.
- 1 container of export furniture damaged by sea water = losses could reach hundreds of millions.
- If your warehouse is large in scale, the loss figure could easily reach billions of rupiah.
Case Study: Flooded Furniture Warehouse in Jepara
In late 2022, Jepara, known as Indonesia’s largest wooden furniture center, was hit by flash floods. Hundreds of furniture warehouses were submerged in waist-deep water. Wooden tables, chairs, and cabinets ready for shipment to overseas buyers were severely damaged by the mud and saltwater.
- The total loss is estimated to reach Rp 35 billion in just 2 weeks.
- Many small factories were forced to close down because they lacked financial protection.
- The international buyer canceled the contract because the quality of the goods did not meet standards.
Case Study: Furniture Factory Fire in Surabaya
In Surabaya, a sofa factory caught fire due to an electrical short circuit in the foam oven. The fire spread quickly due to the flammability of foam.
- In less than 1 hour, the warehouse stocking sofas and chairs was completely burned down.
- Losses reachedRp. 20 billion, not including loss of customers due to production delays.
- Fortunately, the factory already had a policy.Property All Risk (PAR)which includes stock protection. An insurance claim worth Rp 18 billion was successfully paid, allowing the factory to recover.
Furniture Industry Data & Statistics
Indonesian Furniture Industry Data
- According to Central Statistics Agency (BPS) 2023, the value of Indonesian furniture exports reachedUSD 2.5 billion, with main destinations to the United States, Japan, the Netherlands and Germany.
- The Indonesian furniture industry absorbs more than 500 thousand workers, mostly in the centers of Jepara, Cirebon, Pasuruan, and Surabaya.
- Global demand for furniture made from teak and rattan continues to increase, especially in the European market which prioritizes environmentally friendly products.
Domestic Market Trends
- Data fromIndonesian Furniture and Craft Industry Association (HIMKI)shows that the growth in domestic furniture sales reached7–10% per year.
- The biggest demand comes from the sectorhousehold (sofa, dining table, cupboard) and office (work desk, ergonomic chair, filing cabinet).
Risks Associated with This Data
- Large stock value→ This means that losses could reach billions of rupiah if not protected.
- Export request→ Stock quality must be maintained, because foreign buyers have strict standards (there must be no defects, mold, or damage).
- Market growth→ the larger the stock held in the warehouse, the greater the risk of damage and loss.
Types of Risks That Threaten Furniture Stock
1. Physical Risks
- Moisture → warped wood, mold, peeling finishing layers.
- Termites & insects → wood structure is destroyed from the inside, difficult to detect early.
- Human error → workers move goods incorrectly, forklifts damage surfaces.
2. Natural Disaster Risk
- Flooding: water penetrates the wood fibers, causing decay.
- Fire: furniture stock is flammable because it is made of wood & fabric.
- Earthquake: knocks down large shelves, destroys stock in an instant.
3. Criminal Risk
- Theft: expensive furniture items are targeted.
- Internal fraud: loss of goods by employees.
4. Financial Risk
- Loss of stock means loss of capital & expected profits.
- No goods = order cancelled, customer trust decreases.
Data: Based on reportsWorld Furniture Outlook 2023The global furniture market is valued at USD 600 billion. Indonesia, as a major exporter, contributes approximately USD 2.5 billion. This means that losing furniture stocks is tantamount to missing out on a significant opportunity in international trade.
Safe Tips for Storing Furniture Stock in a Warehouse
1. Build the Ideal Warehouse
- Make sure there is a ventilation & temperature control system.
- Use a dehumidifier to control humidity.
- The warehouse floor should be higher so that it is not easily flooded.
2. Layout & Storage
- Use wooden/plastic pallets to prevent items from coming into direct contact with the floor.
- Don’t stack too high, maximum 2–3 units.
- Leave space between products for air circulation & to prevent scratches.
3. Material Protection
- Wrap the furniture with bubble wrap or plastic wrapping.
- For wood, carry out anti-termite treatment at least once every 6 months.
- Use a special cloth cover to protect it from dust.
4. Security System
- Install CCTV with online access.
- Provide a fire alarm & light fire extinguisher (APAR).
- Make sure there is a security guard on duty 24 hours.
5. Digital Stock Management
- Use cloud-based inventory software.
- Implement a barcode or RFID system.
- Record every item in/out in real-time.
6. Healthy Warehouse Checklist
- Room temperature 20–25°C
- Humidity <60%
- The description is enough
- Evacuation routes & fire extinguishing systems are available
- Weekly stock check
With these steps, the risk of damage can be minimized. But remember: no system is 100% risk-free.
The Role of Insurance in Protecting Furniture Stock
What is Furniture Stock Insurance?
It is financial protection that provides compensation if furniture stock is damaged, lost or destroyed due to certain risks.
Types of Policies That Can Be Used
- Property All Risk (PAR) → protects almost all risks except those excluded.
- Industrial All Risk (IAR) → suitable for large-scale furniture factories.
- Warehouse Insurance → focuses on protection for storage warehouses.
Main Benefits
- Reduce risk major financial losses.
- Provides a sense of security for business owners.
- Increase partner & investor confidence.
- Supporting business continuity.
Case Study: Furniture Stock Theft in Jakarta
A furniture distributor in North Jakarta experienced a major theft. The perpetrators gained entry through the warehouse roof and made off with dozens of premium sofa and chair sets.
- The loss value reached almostRp. 5 billion.
- Unfortunately, the warehouse owner did not have insurance coverage → his business faltered as he had to cover the losses himself.
Short FAQ
- Are insurance premiums expensive? → Depends on the stock value and policy type, but they’re much cheaper than unprotected losses.
- Are claims difficult? → With the help of a professional broker, the claims process can be quick and smooth.
Why Choose L&G Insurance Broker?
The Role of Insurance Brokers
Brokers act as independent intermediaries between clients and insurance companies. Unlike agents, brokers work on your behalf.
L&G Insurance Broker Advantages
- Experienced >30 years handling industrial risks.
- Specializing in the stock, warehousing, and manufacturing sectors.
- Full claims assistance: from document collection, negotiations with insurance, to disbursement of funds.
- Extensive network with local & international insurance companies.
With L&G, you don’t have to bother learning complicated police language. Everything will be clearly translated, so you know what is guaranteed and what is not.
Conclusion
Furniture inventory is a high-value asset that is vital to the business continuity of both stores and manufacturing plants. Risks of loss lurk from various angles: humidity, termites, theft, and even natural disasters.
Good warehouse management is crucial, but it’s just the first step. To truly secure your business, you need financial protection through furniture inventory insurance.
With the right policy, you not only protect your goods, but also safeguard your cash flow, reputation, and business continuity.
Here it is L&G Insurance Broker We’re here as a reliable partner. We’ll help you choose the best policy, negotiate premiums, and oversee claims processing to ensure prompt disbursement.
FREE consultation now:
- WhatsApp: 08118507773
- Email: halo@lngrisk.co.id
Don’t wait for major losses to hit your business. Protect yourself now and secure the future of your furniture business.
