Damaged Imported Goods, But Claims Fail to Be Paid! This Is a Classic Mistake Chinese Entrepreneurs Make in Indonesia

Imagine you’re a Chinese businessman who has just exported 10 containers of factory machinery to Indonesia. The machinery, valued at over USD 5 million, will be used for a large manufacturing project in an industrial area in West Java.

Everything went smoothly until the ship arrived at port. But when the container was opened, everyone was shocked—some of the machinery was submerged in seawater, the electronic components were rusted, and some parts were broken from the heavy impacts during the journey.

You immediately contact the insurance company, believing that the policy Marine Cargo Insurance will bear all the losses. But a few weeks later, you receive devastating news:

“The claim cannot be paid because the policy does not cover the risk improper packing and moisture damage.”

You’re speechless. The policy prepared by the local agent turns out to be inappropriate for the characteristics of the goods and doesn’t cover the most common risks in tropical ocean shipping.

Millions of dollars in losses went unclaimed. Projects were delayed. All because of one thing: choosing the wrong insurance company.

Classic Mistakes Often Made by Chinese Entrepreneurs in Indonesia

Cases like this are not uncommon. Many Chinese businesspeople come to Indonesia believing that the insurance system here is the same as in China—fast, simple, and can be resolved directly with an agent or acquaintance.

However, in Indonesia, the legal and regulatory structure of insurance is very different. Many agents operate without official OJK (Financial Services Authority) permits and don’t even understand the technical details of international transportation. As a result, they simply sell standard policies without performing risk analysis.

The most common errors include:

• Does not include the Institute Cargo Clauses (A) – which should provide the broadest protection.
• Does not include special packaging, humidity and handling clauses (packing, condensation, handling clause).
• Not paying attention to the sum insured according to CIF + 10%.
• Does not conform to sales and purchase contracts (Incoterms) such as FOB, CIF, or DDP.

The result: when goods are damaged or lost, insurance companies easily reject claims on administrative or technical grounds.

Real Case Study: Factory Machine Breakdown at the Port

A Chinese manufacturing company that opened a factory in Batam once imported machinery injection molding. The machine was shipped from Ningbo port to Batam by regular container ship.

During the journey, the ship encountered high waves, and some of the containers were submerged in water. Upon arrival in Batam, the engine was severely damaged, and the project came to a complete halt.

The agent who handles the insurance ensures that the policy marine cargo It is complete. But upon inspection, the policy only included Institute Cargo Clauses (C) — the narrowest coverage — with no protection against moisture or seawater.

The claim worth USD 700,000 was ultimately rejected.

In contrast, another Chinese company that used L&G Insurance Broker for a similar project managed to secure a full claim payment in just two months. Why? Because L&G thoroughly assessed the shipment risks from the outset:

• Suggest ICC(A) for full coverage,
• Added Moisture Damage Clause,
• Make sure the policy coversdoor-to-door transitincluding temporary storage at the port.

L&G even commissioned independent surveyors at the port of destination to document the damage, ensuring the claim cannot be denied.

Why OJK-Registered Insurance Brokers Are So Important

Many foreign entrepreneurs do not yet understand that in Indonesia, OJK (Financial Services Authority) regulations strictly regulate the differences between insurance agents and brokers.

📌Insurance agents work for insurance companies — they represent the interests of policy sellers.
📌Insurance brokers, on the other hand, work for the client (insured) and are obliged to defend their interests.

According to POJK No. 69/POJK.05/2016 and POJK No. 24/2023, only authorized brokers have the right to:

• Develop insurance programs based on actual risk analysis,
• Negotiating the best rates and clauses with various insurance companies,
• Accompanying the insured from the start of the policy until the claim is completed.

Brokers also have business licenses, certified experts, and annual OJK compliance audits.
In other words, brokers are professional advisors, not just policy sellers.

The Digital Era: Easier and More Transparent Processes

In the past, many entrepreneurs considered the process with brokers to be complicated and slow. But now, L&G Insurance Broker has changed all that.

With digital systems, Chinese entrepreneurs can:

• Submit insurance requests directly online,
• Upload cargo documents and delivery schedules,
• Monitor policy and claim status in real-time,
• Communicate directly in Indonesian, English, or Mandarin.

The process is transparent, fast, and secure — without error-prone unofficial intermediaries.

L&G Insurance Broker: A Trusted Partner for Logistics Businesses from China

As an official and registered insurance broker with the OJK, L&G Insurance Broker has assisted many Chinese companies in various sectors — including logistics, heavy equipment, and manufacturing.

L&G Advantages:

• Experienced in handling sea, air and land transportation insurance (marine cargo, inland transit, warehouse risks),
• Able to design custom policies for high-risk items such as industrial machinery, electrical panels, or chemicals,
• Having an international network of loss adjusters to ensure claims are processed quickly and objectively,
• Provides digital claims reporting services that can be accessed at any time.

In some cases, L&G has successfully negotiated claim payments of up to 100% by being able to demonstrate that the damage was covered by the policy — a result of well-thought-out insurance program design from the outset.

Important Lessons for Chinese Entrepreneurs’ Staff and Translators

Many Chinese business owners rely on local staff or translators to handle their insurance. However, this is a significant responsibility.

If you choose the wrong unauthorized party, the consequences can be fatal:

• Claims failed to be paid,
• Business relationships are broken,
• Even the company’s reputation is tarnished in the eyes of investors and partners.

Make sure you only work with an insurance broker that has an official OJK license, such as L&G Insurance Broker, who doesn’t just sell policies — but protects you when disaster actually strikes.

Conclusion: Don’t Repeat the Same Mistakes

Damaged imported goods, project delays, or failed claims are not bad luck — they are the result of poor decisions.

Don’t repeat the same mistakes as many other entrepreneurs.
Use an OJK-registered insurance broker like L&G Insurance Broker, who understands your business risks, speaks your language, and stands by your side.

Because in the world of logistics and transportation business, the best protection is not just a policy, but also the right partner.

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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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