Big Investment, Bigger Risk
In recent years, Indonesia has become a prime investment destination for Chinese property entrepreneurs. From industrial estate developments in Karawang, apartment projects in Jakarta, and commercial complexes in Surabaya, the investment value reaches trillions of rupiah.
However, behind the glitz of these projects lies a significant risk that is often overlooked: inadequate insurance coverage. Many Chinese entrepreneurs believe it’s enough to simply purchase a policy from a local agent or acquaintance without checking the insurance’s credibility and terms.
As a result, when a fire, flood, or earthquake occurs — they only realize that their insurance coverage is inadequate or even invalid.
True Story: Commercial Building Burns Down, Claim Denied
Some time ago, a Chinese company constructing a modern office building in Tangerang’s business district experienced a major fire. Losses were estimated at Rp 120 billion.
The company felt secure because it had a property insurance policy purchased through an “agent they knew.” However, when it filed a claim, it was shocked by the harsh reality: the claim was denied by the insurance company.
The reason?
- The policy does not cover the risk of fire due to electrical short circuit due to exclusions in the clause.
- The insured value is only 70% of the actual building value (underinsurance).
- Agents do not assist with the claims process because legally agents represent the insurance company, not the insured.
Companies lose billions of rupiah without protection, even though the additional costs of using an official insurance broker registered with the OJK are almost non-existent.
Why Do Many Chinese Entrepreneurs Make Missteps?
There are several common reasons:
- Lack of understanding of the Indonesian regulatory system.
Many entrepreneurs assume the Indonesian insurance system is similar to China’s, where agents can act independently. However, in Indonesia, agents legally represent the insurance company, not the client. - Rely on personal recommendations.
In Chinese business culture, personal trust is crucial. However, in insurance, professionalism and OJK licensing are far more important than mere personal relationships. - Lack of support from translators or local staff who understand insurance.
Many translators or local staff do not understand the provisions of Indonesian insurance law, so they choose the wrong partner and put their company at great risk.
OJK Clearly Regulations: Brokers Must Defend Customers
The Indonesian government, through the Financial Services Authority (OJK), has issued POJK No. 69/POJK.05/2016, which emphasizes that insurance brokers are required to defend the interests of the insured (customer), not the insurance company.
Broker functions include:
✅Analyze the risks professionally before purchasing a policy.
✅Find an insurance company with the best terms and rates.
✅Assist in negotiating premiums and important clauses.
✅Accompanying and fighting for claims in the event of a loss.
On the other hand, agents are only tasked with selling insurance company products, so they cannot be a neutral party.
The Vital Role of Authorized Insurance Brokers in the Property Industry
In the property business, each stage has different risks:
- Construction phase: risk of work accidents, fire, or equipment damage.
- Operational stage: risk of fire, flood, earthquake, sabotage, or business interruption.
- Rental stage: risk of legal liability to the tenant (liability insurance).
An insurance broker such as L&G Insurance Broker will assess all these risks and ensure each risk has relevant insurance coverage and sufficient coverage.
Additionally, L&G helps negotiate the best premiums without sacrificing coverage, and ensures all claim documents are properly prepared to avoid rejections.
Digital Technology Makes Business Easier for Chinese Entrepreneurs
In the past, the insurance process was considered slow and bureaucratic. That’s no longer the case. Through L&G Insurance Broker’s digital system and online platform, the entire process—from risk analysis and quotation to claims reporting—can be conducted quickly and transparently.
L&G also has a bilingual team (Indonesian – Mandarin – English) which facilitates communication between Chinese entrepreneurs and insurance companies in Indonesia.
Case Study: L&G Assists with Industrial Building Claims in Batam
A Chinese manufacturing company in Batam experienced a major fire in its warehouse, causing losses of up to IDR 45 billion. Thanks to the assistance of L&G Insurance Broker, the entire claim was paid in full within three months.
The key is in:
- Selecting a policy with the right clauses (Fire and Lightning, Earthquake Extension, and Business Interruption).
- Examination of the insured value according to replacement cost.
- Complete claims documentation from the start.
Without a broker, this case could result in a denial or partial claim.
Conclusion: Protect Your Investment Before It’s Too Late
For Chinese entrepreneurs in Indonesia, large-scale property investment is not just about building a building — it’s also about protecting assets and ensuring business continuity.
A small mistake in choosing an insurance company can cause financial losses of up to hundreds of billions of rupiah.
Therefore:
- Use only official insurance brokers registered with the OJK.
- Make sure the broker is defending your interests, not the insurance company’s.
- Choose a partner who has expertise, cross-industry experience, and high integrity.
And for that, L&G Insurance Broker is ready to be a strategic partner for Chinese entrepreneurs throughout Indonesia — ensuring that every asset, project, and investment is protected with the best guarantees and professional services.
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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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