China’s Exploding Heavy Equipment Market in Indonesia
In the last five years, the heavy equipment market in Indonesia has been dominated by products from China.
Brands such as SANY, XCMG, Zoomlion, SDLG, Liugong, Shantui, Lonking, Lovol, Foton, XGMA, and Yutong have dominated various sectors: mining, infrastructure, plantations, and road construction.
The quality of Chinese heavy equipment is now significantly better than it was a decade ago. Competitive prices, abundant spare parts, and direct financing from Chinese manufacturers have led to a rapid increase in heavy equipment sales.
However, behind the success story, many distributors and buyers face major problems when it comes to insurance claims.
Not only were they rejected, but many claims worth billions of rupiah were left hanging for years without certainty.
The hard fact is: most of these problems occur not because insurance companies don’t want to pay, but because insurance placement is done the wrong way.
Wave of Failed Claims: Data and Facts on the Ground
Based on L&G Insurance Broker’s experience, of the hundreds of Chinese heavy equipment policies it has handled, more than half of the initial claims were problematic.
Some real examples:
- A Zoomlion crane worth Rp 7 billion collapsed during EPC project work in Kalimantan – initial claim rejected.
- XCMG excavator sinks in coal mine – insurance refuses because policy does not cover operational risks.
- SANY bulldozer caught fire during use – claim only partially paid due to unclear wording.
- SDLG loader was severely damaged – claim rejected due to “mechanical breakdown”.
Most distributors only realize after a loss occurs that their policy did not provide the protection they had hoped for.
Why Are Claims Rejected? Mistakes Start Right From the Start
Let’s take a closer look at the main reasons why many claims for Chinese-made heavy equipment are rejected in Indonesia.
1. Direct Insurance Placement Without a Broker
Many Chinese heavy equipment distributors in Indonesia take out insurance directly with insurance companies without professional assistance.
They think the process is simple — just fill out a form, pay the premium, and the policy is issued.
But in practice, every word in the policy determines the fate of future claims.
Without a broker who understands underwriting techniques and Indonesian insurance law, the policies issued are usually very standard, often not even appropriate to the risks of heavy equipment in the field.
As a result, when a large claim occurs, the insurance company finds a loophole to reject it on the grounds that it is “not covered by the policy”.
2. Relying on a “Friend” Agent Who Doesn’t Understand the Risks
This phenomenon is common in the field. Many Chinese distributors choose private agents—often friends, acquaintances, or local staff—who offer low premiums.
But, private agents do not have:
- Technical expertise in drafting strong terms & conditions (T&C).
- Direct access to claims management and reinsurance.
- Negotiating power with major insurance companies.
For small claims (e.g. broken glass, or minor damage), an agent may be able to help.
However, if the claim value is large and requires the involvement of foreign insurance or reinsurance directors, they have no bargaining power at all.
3. Choosing the Wrong Type of Policy
The next most common mistake is choosing the wrong type of policy.
Many Chinese heavy equipment are covered by Fire & Allied Perils or PAR (Property All Risks), even though they should be covered by Contractor’s Plant & Machinery (CPM) or Machinery Breakdown (MB).
As a result, important risks such as:
- Equipment overturned at the project site,
- Flooded while working,
- Damaged due to operator negligence
not guaranteed by the police.
Distributors only become aware when a claim is filed — and it’s too late.
4. No Assistance During Claims
Insurance claims are not just about sending a letter and waiting for the results.
It requires a disciplined process: prompt reporting, complete documentation, intense communication with the loss adjuster, and final negotiations.
Without a broker, this process is often messy:
- Late report (more than 7 days).
- The equipment was repaired before the surveyor arrived.
- Evidence of loss is insufficient.
As a result, insurance companies easily reject claims due to “inappropriate procedures”.
5. Weak Wording and No Additional Protection Clauses
Wording is the “main weapon” in an insurance policy.
Many Chinese heavy equipment policies are drafted with standard wording, without additional clauses such as:
- Operational Risk Extension
- Waiver of Subrogation
- Removal of Debris Clause
- Overturning, Collision, or Impact Coverage
In fact, it is these clauses that determine whether large claims can be paid or not.
Immediate Impact on Chinese Heavy Equipment Distributors and Leasing Companies
Claim failure is not just a matter of losing one unit of heavy equipment.
The impact is huge for the entire Chinese heavy equipment business ecosystem in Indonesia:
- Huge Financial Loss
Distributors must bear the costs of lost or totally damaged equipment, which can reach billions of rupiah.
- Bad Debt
Because heavy equipment sales are generally through a credit system, losing the equipment means losing the collateral asset — while installments still have to be paid.
- Damaged Reputation
Local customers are losing trust in Chinese brands because they feel “unsupported when making claims”.
This is dangerous, because brand reputation is difficult to restore.
- Disruption of Relationship with Manufacturer
Chinese manufacturers may not understand the intricacies of the Indonesian insurance system. Distributors could be accused of negligence, when the root of the problem lies in the flawed policy closing process.
Real-Life Example: When a Broker Becomes a Savior
One of SANY’s heavy equipment distributors in Kalimantan experienced a major incident:
Two excavator units delivered by barge sank in the middle of a storm.
Initially, the claim was rejected because the policy did not cover the risk of “transit over water”.
Distributors panicked — it was worth almost Rp 5 billion.
After the Insurance Broker steps in, our team:
- Analyzing the police wording in depth,
- Finding a clause that allows claims to remain in the “accidental loss” category,
- Submitting technical and legal arguments to insurance and reinsurance companies,
As a result, the claim was approved and paid in full.
Distributors are spared huge losses — and customer relationships remain intact.
Why Insurance Brokers Are a Must for Chinese Heavy Equipment Distributors
- Brokers Are Client Representatives, Not Insurance
Unlike agents, brokers do not represent insurance companies.
Brokers work 100% in the client’s best interests — ensuring that all risks are truly covered in the policy.
- Brokers Have Technical and Legal Expertise
Brokers like L&G Insurance Broker have underwriters, risk engineers, and legal experts who understand insurance contracts down to the smallest detail.
- Brokers Have Bargaining Power
With large business volume and a good reputation, L&G has high negotiating power with insurance and reinsurance companies.
That means a higher chance of claims being paid and a faster process.
- Brokers assist with claims from start to disbursement.
L&G has a professional claims team that helps from:
- Initial reporting,
- Coordination with loss adjuster,
- Review of technical reports,
- Final negotiations with insurance and reinsurance.
All processes are carried out transparently, quickly and documented.
- Brokers Guarantee Digital Transparency
Through the LIGASYS system, clients can monitor policy and claim status online.
No more confusion or communication hiccups — everything is real-time and verifiable.
L&G Insurance Broker: Real-Life Experience in China’s Heavy Equipment Industry
L&G is not a new player.
We have insured thousands of Chinese heavy equipment from brands such as SANY, XCMG, Zoomlion, SDLG, Liugong, Shantui, Lovol, Lonking, and others.
We have also resolved dozens of large claims worth billions of rupiah — from fires and drownings to total damage in mining and construction projects.
Some of our advantages:
- 20+ years experience in the heavy equipment industry.
- Strong in-house claims and legal team.
- Extensive relationships with global insurance and reinsurance companies.
- A proactive, not a reactive, approach to risk management.
Preventive Steps: What Chinese Distributors Should Do Now
If you are a distributor of Chinese heavy equipment in Indonesia, here are some practical steps to avoid becoming a victim of failed claims:
- Conduct an audit of your insurance policy now. Make sure the wording is appropriate for heavy equipment risks.
- Use a licensed and experienced broker, not a private agent or direct placement.
- Make sure all heavy equipment is insured with a CPM or MB policy, not just PAR.
- Include all important clauses, especially Operational Risk Extension, Waiver of Subrogation, and Impact Coverage.
- Coordinate all claims through your broker to ensure the procedure is correct from the start.
Conclusion: Protect Your Business, Protect Your Reputation
Chinese heavy equipment distributors in Indonesia must understand that insurance is not just a formality, but an investment in business protection.
The claim failed not because of bad luck, but because of a strategic error from the start.
Don’t let one small mistake destroy your big business.
Entrust your heavy equipment insurance matters to L&G Insurance Broker, who has:
- Insuring thousands of Chinese-made heavy equipment,
- Successfully handled dozens of large claims,
- And has a strong reputation in the heavy equipment and energy industry.
Stop managing directly or through private agents.
Use L&G Insurance Broker – your professional partner in protecting your Chinese heavy equipment business in Indonesia.
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Contact L&G Insurance Broker today!
For a FREE consultation regarding your heavy equipment and project protection:
HOTLINE L&G 24 JAM: 08118507773 (PHONE – WHATSAPP – SMS)
Website: lngrisk.co.id
Email: halo@lngrisk.co.id
