Every year-end, thousands of companies in Indonesia focus on financial reports, stocktaking, internal audits, and project closures. Amidst this busy schedule, one crucial aspect is often overlooked: property insurance renewal.
And it is this small gap that every year results in huge losses, from hundreds of millions to Rupiah. Many property owners, business owners, and even company management don’t realize that once a policy lapses, they lose all coverage. Numerous cases demonstrate that companies went bankrupt not because of fire, but because they didn’t have an active policy when the disaster struck.
If you don’t know your policy’s expiration date, the best time to check is now.
Need a free policy check? Contact L&G Insurance Broker!
WhatsApp: 0811-8507-773
Email: halo@lngrisk.co.id
Fatal Impact If Renewal is Late
Late renewal isn’t just an administrative error. The impact can be devastating for a company.
- No Protection When Risk Occurs
Floods, fires, pipe leaks, machine breakdowns, and theft cannot all be claimed.
- Massive Financial Losses
80% of property losses experienced by companies exceeded IDR 500 million.
40% even exceeds IDR 5 billion.
- Operational Disruption
A few days of downtime can cause losses far greater than physical damage.
- Reputation and Client Trust Decrease
Especially for hotels, factories, distribution centers, and retail.
- Risk of Bankruptcy
According to international data, 25% of businesses do not survive a major disaster when they do not have active protection.
Case 1 – FMCG Distribution Center (Loss of Rp 5.8 Billion)
As the year draws to a close, an FMCG distribution center in Bekasi is at its busiest. Logistics activity increases dramatically, the warehouse is packed with year-end inventory, and trucks are constantly coming and going. Amidst the mounting workload, the administrative team is overwhelmed with reports and correspondence. Among the dozens of emails coming in daily, one important email remains unanswered:property insurance policy renewal reminder.
Busyness caused the reminder to be overlooked, leading to the policy’s expiration without even realizing it. Just a week after the policy officially expired, extreme rains lashed the Bekasi area. The saturated soil caused one of the warehouse walls to collapse, damaging thousands of cartons of product. Losses reached Rp. 5.8 billion, and the company must cover the entire cost because the policy has lapsed. There’s no coverage, no claim, and no room for negotiation. A small mistake can lead to significant losses.
Case 2 – 4-Star Hotel (Loss of Rp 3.4 Billion + Deteriorated Reputation)
A four-star hotel in Bali was entering its year-end audit period, a time when all departments were focused on reporting, inventory, and high-season preparations. Amidst the busy schedule, discussions had already begun regarding the renewal of the property’s insurance policy. The broker had sent repeated reminders, and the insurer had also followed up to complete the required technical documentation. However, management delayed completing the paperwork because staff were divided among various year-end tasks.
The grace period passed without warning. Just four days after the policy lapsed, an electrical short circuit occurred in the main panel, causing major damage to the tower’s AC system. Hotel operations were paralyzed for two days, guests complained, and dozens of reservations had to be refunded.
The immediate loss reachedRp. 3.4 billion, not including additional costs in the form of dozens of refunds And hundreds of negative reviews which damages the hotel’s reputation. Without an active policy, the company must cover all losses itself. A small negligence can have fatal consequences for the business’s image and finances.
Case 3 – Food Factory (Loss of Rp. 9 Billion)
A food factory in West Java was undergoing minor renovations to its production area to increase capacity and improve workflow. These changes prompted the insurer to request several additional documents for the renewal process, including updated building blueprints, renovation details, and the latest asset valuation adjustments. These requests were standard, but the engineering team that was supposed to prepare the documents was working behind schedule due to internal project concerns.
Renewal administration was also delayed. The policy entered its inactive period while all the paperwork was incomplete. Little did anyone know that a week before the final files were ready to be sent, a heater malfunctioned. A small spark ignited a fire, and although the blaze was quickly extinguished, the damage to the machinery, wiring, and some of the raw materials was significant.
Total loss reachedRp. 9 billionand had to cover the entire cost themselves. The claim was denied because the policy hadn’t been reinstated. A few days’ delay turned into billions in losses.
Why Do Thousands of Companies Fail to Renew on Time?
Here are some general findings based on L&G’s experience managing thousands of corporate policies:
- No Internal Monitoring System
Many companies don’t have a dedicated PIC, systematic reminders, or digital reminders. Expiration dates often slip by.
- Wrong Assumption: “There is Still a Grace Period”
Even though not all policies a grace period, and some insurers reject claims if payment has not been made.
- Documents Not Ready
Updates on asset values, survey results, maintenance reports, and warranty compliance are often delayed.
- Unreported Building Changes
Renovations, warehouse expansions, and changes in production capacity all require revisions during renewal. These delays prolong the process.
- Outstanding Payment
Pending premium = inactive policy.
- Understaffing at the End of the Year
December–January is the peak of activity, making insurance administration often not a priority.
All these factors seem small, but when combined, they can cause devastating losses.
Mandatory Checklist to Ensure Your Renewal is Safe
Here’s a checklist we typically use at L&G to ensure our clients don’t experience any protection gaps:
- Check the expiration date & grace period
Make sure there is no gap of even 1 day.
- Update asset value (TIV)
Adjust for inflation, renovations, additional machinery, or inventory changes.
- Review operational changes
Including:
- new production process
- different raw materials
- storage of risky goods
- layout changes
- Hapus outstanding payment
Premiums must be cleared before the due date.
- Audit warranty
Make sure:
- CCTV works
- active hydrant
- active smoke detector alarm
- APAR ter-update
- Check the loss history for the last 1–5 years
- Update the latest survey or inspection report
- Make sure all documents are complete before renewal
If you haven’t checked even one point, the risk of delay increases drastically.
Solution: Leave Renewal to the Experts
L&G Insurance Broker has more than 30 years of experience handling corporate property policies in Indonesia, from hotels, factories, campuses, warehouses, retail, to other commercial properties.
L&G handles all your renewal processes:
- Sending automatic reminders long before the policy expires
- Managing documents and administration
- Arrange technical surveys & inspections
- Negotiating premiums with many insurance companies
- Ensure warranty is fulfilled
- Keeping it from happening gap period
- Accompany 100% of claims until they are paid
With L&G, you don’t have to worry about your policy lapsing or being late in renewing.
We make sure your protection never stops.
Check Your Police Today!
Before the risk occurs, do a quick check:
- Do you know the expiration date of your property policy?
- Has there been a reminder from the insurer?
- Are there any outstanding payments?
- Are there any new buildings or asset changes?
- Has the warranty been fulfilled?
- Has the renewal been processed?
If you’re unsure about any of them, don’t delay. Every day of delay can be fatal.
Conclusion
Every year, thousands of companies in Indonesia experience huge losses just because of one thing, namely being late for property insurance renewal. It may seem simple, but the impact can be devastating. Stories of companies losing billions of rupiah are not uncommon; they happen almost every month.
By ensuring timely renewal of your property insurance, you protect your assets, operational flow, reputation, and business continuity. Don’t let small administrative errors lead to major losses.
Get a FREE policy check & consultation now with L&G Insurance Broker!
📞 WhatsApp: 0811-8507-773
📩 Email: halo@lngrisk.co.id
