China’s Heavy Equipment Market Boom and the Unseen Risks
In the past five years, the heavy equipment market in Indonesia has been dominated by Chinese brands such as SANY, XCMG, Zoomlion, SDLG, Shantui, Liugong, Lovol, Lonking, Foton, XGMA, and Sunward.
Competitive prices, improved technology, and long-term credit schemes make their products the primary choice for national construction, mining, plantation, and infrastructure projects.
However, behind the success of the sales, there are big risks that are often overlooked:
Thousands of Chinese heavy equipment units are missing out on effective insurance coverage due to a fundamental mistake — arranging insurance without a professional broker.
As a result, many Chinese distributors and lessors in Indonesia fail to receive claim payments when their equipment is damaged, sunk, burned, or lost in the field.
This article will reveal the real dangers of managing insurance without a broker, and why L&G Insurance Broker is a must-have solution for every Chinese heavy equipment company looking to be secure and sustainable in Indonesia.
Why Many Chinese Heavy Equipment Companies Mismanage Insurance
- Considering Insurance as Just a Formality
Many Chinese companies new to Indonesia consider insurance merely an administrative requirement — something necessary to fulfill leasing, tender, or shipping contracts.
However, insurance is not just a “protection paper”.
It is a financial mechanism to save the company from potential huge losses.
However, because it is considered trivial, many companies only place policies as is, without understanding:
- Does the wording match the risks of the heavy equipment?
- Does the guarantee cover the actual work location (mine, river, sea, remote area)?
- Is insurance willing to pay if the equipment is damaged during transportation?
Most of the answers are: don’t know.
- ‘Friendly’ Agents Are Not the Solution
Many distributors or branches of Chinese companies in Indonesia choose a “friend” as an agent because:
“Easier communication, faster, and cheaper.”
But in reality, agents are not brokers.
The fundamental difference:
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For small claims — like broken glass or minor damage — an agent may be able to help.
But when a major claim occurs (for example, equipment worth Rp. 10 billion sinks in a harbor or catches fire at a mining site), agents do not have access to the board or reinsurance level.
The end result: claims are denied, or only partially paid.
- No Legal and Technical Protection
Without brokers, Chinese heavy equipment companies often lose their bargaining position in negotiations.
They don’t know whether the policy terms comply with Indonesian law, whether the wording is advantageous, or whether it risks invalidating the claim.
Real example:
- In many cases, policies don’t mention “Theft and burglary,” even though the heavy equipment is rented to a third party. When the equipment is stolen, claims are immediately denied.
- Many policies also don’t include a “Marine Inland Transit Clause” for equipment shipped from the port to the mine site. When a truck overturns, the insurance company denies coverage, citing “transportation risks not covered.”
All of this could have been prevented if a professional broker had reviewed the policy wording from the start.
Real Impact: From Hundreds of Millions to Billions of Rupiah in Losses
Without proper protection, financial losses can be substantial.
Here are some real cases in the field (anonymized):
Case 1 – SANY Excavator Sinks in Mahakam River
Distributors arrange their own insurance without brokers.
The barge sank while transporting heavy equipment.
The policy apparently does not cover river transportation (marine inland transit).
The claim worth Rp. 6.5 billion was completely rejected.
Case 2 – SDLG Equipment Lost at Mining Site
The tenant ran away with the equipment.
The policy only covers the risk of fire and mechanical accidents, without theft by hirer.
Claim of Rp. 3.8 billion rejected.
Case 3 – XCMG Loader Catches Fire at Project Site
The agent who arranged the insurance did not add the clauseExternal Explosion Clause.
The insurance company refused on the grounds that “the cause of the fire was an external explosion which was not covered”.
Distributors bear the losses themselves.
In all the above cases,one small mistake in the policy wording resulted in losses of billions of rupiah.
And what’s more fatal — the company’s reputation in the eyes of principals and customers is damaged.
They are considered incapable of providing protection for customer assets.
Why Insurance Brokers Are a Must
Insurance brokers are not just intermediaries.
Brokers are your representative— the party legally in charge protects the interests of the insured (customer).
Here are the reasons why every Chinese heavy equipment company must use professional insurance brokers such as L&G Insurance Broker:
- Brokers Act 100% in Your Interest
Unlike agents who work for insurance companies, brokers work for you.
It means:
- Brokers will search for the best policies at the best prices from various insurance companies.
- The broker will check each clause to suit your business needs.
- The broker will help negotiate additional conditions (special clauses) so that the risk of a claim being rejected can be eliminated.
- Brokers Have Technical and Legal Expertise
Heavy equipment insurance is not a simple matter.
There are dozens of technical terms and legal clauses that must be arranged with precision, such as:
- CPM (Contractor’s Plant & Machinery Insurance)
- Third Party Liability Clause
- Marine Cargo & Transit Clause
- Strike, Riot, and Civil Commotion (SRCC)
- Automatic Reinstatement Clause
- Theft by Hirer
L&G Insurance Broker has technical, legal, and risk management who are experienced in setting all these types of clauses — ensuring each policy has no loopholes.
- Brokers Have Connections to International Reinsurance
If the claim is of large value (for example > IDR 10 billion), the payment decision is usually not only at the local insurance company level, but also involves foreign reinsurance companies like Swiss Re, Munich Re, atau Korean Re.
Without a broker, you don’t have direct access to influence decisions at this level.
L&G has — and it’s crucial in the big claims process.
- Broker Handles Claims Until Paid
A professional broker not only helps when purchasing a policy, but also when a claim occurs.
L&G Insurance Broker, for example:
- Collaborate with independent loss adjusters for loss investigation.
- Oversee communication with insurance and reinsurance company claims teams.
- Present technical arguments and field evidence to ensure claims are paid in full.
The result?
Dozens of major claims — including Chinese-made heavy equipment —successfully completed with full payment.
- Broker Fees Are Paid by the Insurance, Not the Client
This is the most common misconception.
Many people think that using a broker will increase costs.
Whereas, Broker fees are included in the premium paid to the insurance company.
So there is no additional cost to the client, but the benefits are enormous:
- More complete protection,
- The risk of claims being rejected is drastically reduced,
- Faster and more professional claims process.
Why Choose L&G Insurance Broker?
L&G is not a new player.
As a licensed insurance brokerFinancial Services Authority (OJK)with more than 30 years of experience, L&G has helped thousands of companies in Indonesia, including manyChinese companies operate in the heavy equipment, construction and mining sectors.
L&G Advantages:
✅ Experienced in China’s heavy equipment industry
Have handled thousands of heavy equipment policies from brands SANY, XCMG, Zoomlion, SDLG, Shantui, Liugong, and others.
✅ Track record of large claims settlements
Dozens of large claims (worth IDR 1 billion – IDR 50 billion) were successfully paid in full thanks to L&G’s assistance.
✅ Extensive international network
Partnering with world-class insurance and reinsurance companies to ensure large capacity.
✅ Digital and professional approach
Using the systemLIGASYS Insurance Broking System for real-time policy monitoring, claims, and reporting.
Success Case Study: L&G Saves Rp15 Billion in Claims
A Chinese heavy equipment distributor in Jambi sent heavy equipment to Kalimantan and lost 10 units of heavy equipment, including…an XCMG crane which fell into the sea during loading and unloading.
Initially the claim was rejected due to lack of clause loading & unloading.
L&G stepped in. We conducted an investigation, gathered documentary evidence and witnesses, and renegotiated with the foreign reinsurer.
The result: Rp15 billion claim paid in full within 3 months.
Without a broker, this case would almost certainly be lost without payment.
Strategic Steps for Chinese Heavy Equipment Distributors and Leasing
To prevent your business from becoming the next victim, take the following steps:
- Audit all your heavy equipment insurance policies now.
Ensure that the type, risk, and location are in accordance with field reality. - Stop using personal agents or friends without official permission.
- Use the services of an OJK-licensed broker such as L&G Insurance Broker.
- Make sure all heavy equipment sold on credit has total protection (CPM + Marine Cargo + Credit Insurance).
- Don’t wait for a big claim to occur before acting.
Conclusion: Insurance Without a Broker Is a Dangerous Gamble
Managing insurance without a broker is the same as driving an excavator on the edge of a cliff without brakes.
It may not fall right away, but once a major accident happens, everything is destroyed.
The value of heavy equipment is so high — Rp. 3 billion, Rp. 10 billion, even Rp. 20 billion per unit — that one failed claim can rock a company’s finances.
Don’t let your big investment disappear just because of a small mistake in your insurance policy.
Use L&G Insurance Broker as a professional partner protecting your interests — from equipment purchase, delivery, to claims.
We have experience in insuring thousands of heavy equipment made in China And resolving dozens of major claims with the best results.
✉️Contact L&G Insurance Broker Now
For a free consultation or audit of your heavy equipment policy:
HOTLINE L&G 24 JAM: 0811-8507-773 (PHONE – WHATSAPP – SMS)
Website: lngrisk.co.id
Email: halo@lngrisk.co.id
