One night in an industrial area in Bekasi,Mr. Yeh, a Taiwanese property investor, received shocking news. One of the factory buildings leased to a multinational tenant had experienced a massive fire in the electrical panel area. The building was a high-value asset—worth over Rp 220 billion.
Even more surprising, when a claim was filed, the insurance company rejected most of the claim amount because the policy only covered standard FLEXA, without:
- RSMD/CC
- Electrical Short-Circuit
- Earthquake
- Business Interruption
- Loss of Rent
“I thought everything was automatically guaranteed,” said Mr. Yeh.
This is the most common mistake many Taiwanese entrepreneurs make in the property sector in Indonesia — buying a policy without risk analysis, without a broker, and without adequate wording for such a large asset value.
Indonesia: A Property Investment Paradise for Taiwanese Entrepreneurs
The last five-year trend shows a significant increase in Taiwanese investment in the following sectors:
- Industrial area
- Factory buildings and manufacturing tenants
- Modern warehouse & smart warehouse
- Data center
- Office
- Expatriate residence
- Commercial (malls, shophouses, retail)
The reason is clear:
- big Indonesian market
- the industry continues to grow
- high demand for warehouses and factories
- digital and cloud technologies are developing rapidly
- e-commerce logistics is growing rapidly
However, large physical assets = large risks.
No property is risk-free, especially in Indonesia, which is prone to floods, earthquakes, and fires.
Key Risks Faced by Taiwanese Entrepreneurs in Managing Property and Assets in Indonesia
The following are risk categories that must be understood before preparing an insurance program.
- Fire Risk
Indonesia still has a high rate of factory and commercial building fires due to:
- non-standard electrical installation
- cable overload
- old electrical panel
- use of industrial machines
- human error
Property fire losses can reach hundreds of billions of rupiah.
- Risk of RSMD/CC (Damage Due to Short Circuit)
This is the biggest cause of claims for Taiwanese commercial properties.
Without RSMD/CC extension, claims due to short circuits can be rejected.
- Risk of Flooding and Waterlogging
Many industrial areas are prone to flooding:
- MM2100
- Cikarang
- Karawang
- Bekasi
- Tangerang
Floods can damage:
- factory floor,
- lower electrical panel,
- production machines,
- storage warehouse.
- Earthquake Risk
Indonesia is located on the “Ring of Fire”.
Standard policies do not automatically cover earthquakes.
Many Taiwanese business owners think earthquakes are automatically covered by their policies, but they are not.
- Risiko Business Interruption (BI)
Building damage can cause tenants to be unable to operate.
BI protects:
- loss of rent,
- fixed cost,
- extra cost for restoration.
Without BI, the financial impact of the loss could be greater than the physical damage itself.
- Risk of Damage to Rental Property (Tenant Risk)
This clause includes:
- interior damage,
- damage to facilities,
- damage due to tenant’s negligence.
Without proper protection, owners could be left with renovation costs.
- Data Center & Digital Infrastructure Risks
For Taiwanese entrepreneurs who own or lease data centers, risks include:
- overheating
- server room fire
- power surge
- UPS failure
- cyber attack
- server crash
Digital properties require a special Electronic Equipment Insurance (EEI) + Cyber policy.
- Liability Risk in the Property Environment
Including:
- visitor accident
- vehicle damage in the parking lot
- injuries due to damaged facilities
- lawsuits from tenants
Tenants or visitors can sue the property owner.
Challenges for Taiwanese Entrepreneurs in Choosing Property Insurance
Even experienced property investors often make the following mistakes:
- Assume the standard policy is sufficient
Even though large value properties require many extensions.
- Not understanding technical wording
One different phrase can cause a claim to be rejected.
- Not using a broker
Here’s the biggest source of the problem:
- no risk analysis
- no negotiation wording
- no claims assistance
- there is no best company selection
- Not understanding the importance of reinsurance
For assets worth > Rp 500 billion, global reinsurance is essential.
- Choosing the wrong insurance company
Not all insurance companies are suitable for large assets.
Important Indonesian Government Regulations – Brokers are REPRESENTATIVES OF THE INSURED
Main rules:
- Law No. 40/2014 concerning Insurance
- POJK No. 69/POJK.05/2016
- POJK No. 23/POJK.05/2015
- POJK No. 2/POJK.05/2017
👉 Insurance Broker = Official representative of the INSURED - POJK No. 33/POJK.05/2018
This regulation was issued because many foreign companies (including Taiwanese) experienced:
- claim rejected
- wording discrepancy
- risk estimation error
- differences in policy interpretation
With a broker, this risk can be avoided.
The Role of Insurance Brokers in Protecting Property Assets of Taiwanese Entrepreneurs
Licensed brokers such as L&G Insurance Broker do:
✔Property Risk Analysis
Evaluate:
- electrical installation
- fire extinguishing system
- building structure
- potential flooding
- tenant risk
- earthquake resistance
✔Developing a Comprehensive Insurance Program
Including:
- Property All Risk
- Fire + RSMD/CC
- Earthquake
- Flood
- Machinery Breakdown (if any)
- Electronic Equipment (EEI)
- Business Interruption
- Loss of Rent
- Public Liability
✔ Negotiation of Terms & Wording
To ensure that the police are legally strong.
✔Placement to the Best Insurance Company
Select based on:
- capacity
- rating
- property experience
- reinsurance support
✔ Claim Advocacy
L&G will:
- prepare documents,
- negotiate with the adjuster,
- ensure maximum claim payments.
Case Study (Pseudonym)
Case 1 – “Taiwan Industrial Estate Holdings”
Problem:
- tenant’s factory caught fire
- loss of Rp. 220 billion
- the policy only covers FLEXA
L&G:
- create a new program: PAR + EQ + Flood + BI
- electrical safety audit
- subsequent claims are paid in full
Case 2 – “Formo Digital Data Center”
Problem:
- UPS failure → server meltdown
- damage of Rp. 12 billion
- old policy does not cover EEI or cyber
L&G:
- create an EEI + cyber program
- server room risk assessment
- next incident: 95% claim paid
Case 3 – “Taiwan Commercial Property Group”
Problem:
- flood entered the basement
- damage to tenant vehicles
L&G:
- compile flood extension
- create TPL (Third Party Liability)
- ensure tenants and owners are protected
L&G Insurance Broker’s Advantages for Taiwanese Investors
L&G has a strong track record of serving companies from:
- Japan
- Korea
- China
- Malaysia
- Singapore
- India
- Europe
L&G Strengths:
- industrial & commercial property specialist
- global large project & reinsurance expert
- >30 years of experience
- very strong handling claims
- digital technology through LIGASYS
- reputation for handling assets > Rp 1 trillion
L&G understands the quality standards and expectations of Taiwanese entrepreneurs.
Conclusion
Taiwanese businesspeople in Indonesia hold significant commercial and industrial properties. Without proper insurance coverage, the risks of fire, flooding, earthquakes, liability, and damage to digital assets could result in losses worth hundreds of billions of rupiah.
Best solution:
✔Use a licensed broker (according to OJK)
✔Develop a comprehensive insurance program (PAR, EQ, Flood, BI, Liability)
✔Make sure the wording is strong
✔Use competent insurance and reinsurance companies
✔Ensure professional claims assistance
With L&G Insurance Broker, all property assets, data centers, factories, and commercial investments of Taiwanese companies will be under the best protection.
📌 Disclaimer
This article is intended for educational purposes regarding the risks of commercial property, industrial estates, and investment assets for Taiwanese entrepreneurs in Indonesia. The names of companies, individuals, and events used are pseudonyms or fictitious illustrations in accordance with privacy regulations and the Electronic Information and Transactions Law (UU ITE). The information in this article is not final and does not replace professional consultation. For recommendations on the right insurance program tailored to your business needs, it is highly recommended to consult with a licensed insurance broker such as L&G Insurance Broker, who has experience handling large properties and projects.
