Liga Asuransi – In construction projects, heavy equipment such as excavators, cranes, and bulldozers are vital assets worth billions of rupiah. Every day, this equipment works hard in the field, fraught with risks, from slipping and collisions to damage due to natural disasters. Once an incident occurs, repair costs can drain the project budget and disrupt the work schedule.
According to data from the Indonesian Contractors Association, the value of heavy equipment investment in the national construction sector can reach over IDR 200 trillion per year. With such a large figure, even a minor accident can cause significant losses, especially if the project is delayed. This is why financial protection is a primary need in the modern construction world.
To avoid such huge losses, many contractors and rental companies now choose Asuransi Contractors Plant and Machinery (CPM) Also known as heavy equipment insurance for construction projects, this policy provides comprehensive protection against damage or loss of heavy equipment, whether due to operational accidents, disasters, or theft on the project site.
This article will fully discuss what risks are covered by CPM insurance, what is not included in the coverage, and why it is important to use the services of a trusted insurance broker such as L&G Insurance Broker to get the best coverage with the most efficient premiums.
Consult your heavy equipment insurance needs for free with our experts at L&G Insurance Broker.
Contact us on WhatsApp 08118507773 or email tohalo@lngrisk.co.id.
Operational Risk
In construction projects, the most common risks arise from day-to-day operational activities. Every time heavy equipment is used, there’s always the potential for damage, whether due to human error, extreme terrain conditions, or technical factors within the machine itself.
For example, an excavator slips on a slippery slope, a crane loses balance while lifting a heavy load, or a bulldozer hits hard material hidden in the ground. These types of incidents can cause serious damage to key components like the boom, undercarriage, or hydraulic system. The cost? Hundreds of millions of rupiah per incident.
In one real-life case on a toll road construction project, a crane worth Rp 2.8 billion (approximately US$200,000) was damaged because the operator failed to consider the strength of the soil at the lifting site. The project was halted for two weeks, resulting in additional overtime costs of up to Rp 300 million (approximately US$30,000). However, because the equipment was covered by a CPM policy, all repair costs were covered by insurance, and the project was able to resume without major disruption.
That is powerAsuransi CPM (Contractors Plant and Machinery). This police specifically guarantees damage or loss of heavy equipment that occurs due to accidents while the equipment is being used at the project siteThis means that if the equipment is damaged due to operational factors, not intentional negligence, the insurance company will cover the repair costs according to the insured value.
In addition to covering repair costs, CPM insurance also provides a sense of security for contractors in managing their work project cash flow Without this protection, a company’s emergency fund could be depleted just to repair a single piece of equipment, resulting in delays in wage payments or material purchases.
This is the reason why CPM type heavy equipment insurance became an important component in modern construction project risk management.
External Risks
In addition to the risks associated with using equipment in the field, construction projects also face external risks, namely damage caused by factors beyond human control. Extreme weather, natural disasters, or even criminal acts can occur at any time without warning.
Imagine heavy equipment like a crane or excavator submerged in floodwater at a project site, or a bulldozer catching fire due to an electrical short circuit at night. There are also cases of equipment being stolen or damaged by irresponsible parties. All of these risks can result in significant losses, both financially and operationally, especially if the project has to be temporarily halted due to a major equipment failure.
In Indonesia, these external risks are very real. Flooding in project areas during the rainy season, lightning strikes in open areas, or landslides in hilly areas are common occurrences. Without insurance coverage, contractors are often left to cover repair costs themselves, even facing potential financial losses.dispute with the project ownerdue to work delays.
Well, this is what makes Contractors Plant and Machinery (CPM) insurance so important. A CPM policy covers various external risks, such as:
- Fire, explosion, and lightning strike.
- Natural disasters such as floods, landslides, earthquakes, or storms.
- Criminal acts such as theft or destruction of heavy equipment.
- Collision with other vehicles in the project area.
With this protection, project owners and contractors won’t have to bear the cost of repairing or replacing equipment damaged by events beyond their control. Simply report a claim to the insurance company through a trusted insurance broker like L&G Insurance Broker, and we’ll assist you through the loss management process.
L&G has a team of experts experienced in handling heavy equipment insurance across a wide range of project sectors, from building construction and road infrastructure to mining. So, you don’t need to worry about external risks that could threaten the heavy equipment on your project.
Risks During Mobilization
Not all heavy equipment works at a single project site. In practice, many contractors or rental companies must move equipment from one project site to another. This process is called mobilization, and it’s often the riskiest moment.
Imagine an excavator being transported on a trailer through a narrow road or up a steep incline and then overturning due to brake failure. Or, while being unloaded from a transport truck, it suddenly falls and damages the boom or bucket. Such incidents can cause significant losses before the equipment even gets to work on its intended project.
Fortunately, Contractors Plant and Machinery (CPM) insurance also provides coverage for heavy equipment during transport between project sites, as long as it remains within the coverage area and meets the policy requirements. This means that if an accident causes physical damage to heavy equipment during transport, the insurance company can reimburse repair costs.
This protection is crucial for companies that operate equipment on multiple projects. With CPM heavy equipment insurance, you can focus on project completion without worrying about risks during mobilization.
Without this policy, equipment damage during transit often becomes a source of unexpected losses. For example, a broken undercarriage due to a road collision or a damaged bodywork due to a transportation accident can all cost tens to hundreds of millions of rupiah.
For maximum protection, make sure you use the help experienced insurance brokers such as L&G Insurance Broker, who understand the technical details of heavy equipment mobilization and how to obtain the guarantees that suit your project needs.
Risks that are not borne (Exclusion)
Although Contractors Plant and Machinery (CPM) Insurance provides very broad coverage,stillThere are several risks that are not covered (exclusions) in the policy. It’s important to understand this to avoid misperceptions when filing a claim.
Some examples of risks that are not covered by CPM insurance include:
- Damage due to natural wear, corrosion, or rust due to long-term use.
- Loss or damage due to willful negligence (e.g. operator intentionally turning on equipment without permission).
- Internal mechanical or electrical faults that are not due to external accidents.
- War, riot, sabotage and terrorism (unless there is a special extension of coverage).
- Loss of small spare parts or tools not listed in the insurance list.
Understanding these limits is crucial for contractors and heavy equipment owners to optimally plan their coverage strategies. In some cases, you can request coverage extensions for specific risks, depending on the project’s needs and the agreement with the insurer.
This is where an insurance broker like L&G Insurance Broker plays a crucial role. The L&G team will help you understand your policy, negotiate coverage extensions, and ensure every important risk is covered.
With the help of an experienced broker, you not only purchase a policy, but also get a protection strategy tailored to the characteristics of your project and heavy equipment.
Conclusion
From the discussion above, it’s clear that construction projects aren’t just about time and labor management, but also about managing the risks to the heavy equipment that forms the backbone of the project. Every day, heavy equipment in the field faces threats ranging from operational accidents, natural disasters, theft, and damage during mobilization.
Without proper protection, a single incident can cause significant losses, halt projects, and depress company profits. That’s why having Asuransi Contractors Plant and Machinery (CPM) is no longer an option, but an absolute necessity for every contractor, developer, or heavy equipment rental company.
To ensure your coverage is truly effective and there are no loopholes in your policy, use the services of a trusted insurance broker like L&G Insurance Broker. With decades of experience in the heavy equipment insurance industry, L&G will help you get the best coverage, the most efficient premiums, and fast, transparent claims service.
Consult your heavy equipment insurance needs for free with L&G Insurance Broker.
Contact us now on WhatsApp 08118507773 or email to halo@lngrisk.co.id.
Because protecting heavy equipment means protecting the smoothness and success of your project.
