A major fire incident that struckCiputra Cibubur Mallon Tuesday, February 17, 2026, became a very suffocating tragedy. How could it be, the fire broke out right on the day of the celebrationLunar New Year, a moment when shopping malls should be centers of happiness and massive economic activity. This incident not only left physical damage to the building structures but also served as a painful reminder to the retail industry and property managers in Indonesia of how vulnerable business assets are to unexpected risks.
In the world of risk management, this event is a wake-up call. A fire during peak visitor traffic not only threatened public safety, but also destroyed the building’s assets and wiped out the tenants’ inventory insurance, which was at the height of the shopping season. This article will examine why the scheme property all risk insurance strong and guaranteedpublic liabilityadequate is no longer just an option, but an existential necessity for business continuity.
Fire Chronology: Tragedy in the Heart of the Shopping Season
Based on reports from various major national news sources such as Kompas.com, Detik.com, and Antara News, fire began to be seen blazing at Ciputra Cibubur Mall on the afternoon of February 17, 2026. The situation at that time was very tense because the mall was crowded with thousands of visitors who were taking advantage of the Chinese New Year national holiday.
The fire reportedly originated on the top floor (4th floor), an area dominated by food outlets (food court) and a family entertainment center. The investigation team’s initial suspicions indicated a problem with the wiring in one of the tenant’s kitchens, which then spread rapidly through the ceiling and ductwork. Thick, black smoke spread within minutes, forcing management to conduct an emergency mass evacuation.
Although the internal automatic fire extinguishing system (sprinklers and hydrants) was working, the rapid escalation of the fire due to the large amount of flammable materials such as cooking oil, Chinese New Year plastic decorations, and furniture, required firefighters (Gulkarmat) to deploy more than 20 fire trucks to tame the fire. This incident was tragic because for the mall management, structural damage meant a loss of rental income (loss of rent), while for the tenant owner, this fire destroyed the stock of goods that had just been upgraded (stock-up) to welcome Chinese New Year and prepare for Ramadan and Eid.
Why is Property All Risk Insurance (PAR) the Absolute Standard?
Many building managers in Indonesia feel that they are safe enough just by having standard fire insurance, known asFLEXAS (Fire, Lightning, Explosion, Impact of Aircraft, and SmokeHowever, the incident at Ciputra Cibubur provides a lesson that commercial building risks are multidimensional or “All Risk”.
Property All Risk Insurance (PAR)All-risk property insurance (PAR) is an insurance contract that covers all physical damage that occurs suddenly and unexpectedly, unless the risk is specifically excluded in the policy. Here are the reasons why PAR is crucial for mall owners:
1. Protection Against Electrical and Mechanical Failures
In standard policies, there are often lengthy debates regarding the origin of a fire. However, in extended PAR schemes, building damage due to short circuits or electrical panel failures is often more straightforwardly covered. Given that modern malls have complex wiring networks behind the ceiling, this coverage is crucial.
2. Accidental Damage (Accidental Damage)
During a fire and the firefighting process, building damage is often caused not only by the flames but also by water from fire hoses or by the force of firefighters breaching doors or walls to access the fire. PAR protects building assets from physical damage during these emergency operations.
3. Debris Cleaning Costs (Removal of Debris)
Many people forget that after a fire is extinguished, a new problem arises: charred building debris. The cost of cleaning, transporting, and disposing of the debris from a commercial building can reach hundreds of millions to billions of rupiah. With a PAR policy extension, these costs are covered, so building owners don’t have to pay out of pocket to begin the renovation process.
Mall Tenant Dilemma: The Fate of Stock in Busy Season
For tenant owners, the disaster on February 17 was a double blow (double blow). One of the most common mistakes mall tenants make is assuming that the insurance paid for by the mall management automatically protects their merchandise or store interior decoration.
In fact, mall insurance only protects the building structure.Merchandise, warehouse stock, cash registers, and even luxury furniture within the store are the tenant’s sole responsibility. This is where independent insurance becomes crucial:
- Inventory Insurance:Protect raw materials or goods ready for sale from the risk of fire or water damage (sprinkler leaks when the system is working).
- Seasonal Stock Insurance:Especially for clothing, cosmetics, or electronics retailers, inventory levels are not always stable throughout the year. During the Chinese New Year period, which coincides with Eid al-Fitr preparations, accumulated inventory typically reaches three to four times the normal monthly level. If the coverage value in the insurance policy is not updated (endorsed) to reflect this increase in inventory, tenants risk significant financial losses due to the regulations.under-insurance.
Assistance from professional insurance brokers such asL&G Insurance BrokerIt is essential to create a balanced contract, ensuring that every product unit on the store shelf has a solid financial safety net.
The Urgency of Public Liability: Protecting Reputation and Wallet
When the fire broke out during the Chinese New Year holiday, the mall was packed with thousands of visitors, including children and the elderly. In a panic, the risk of injury is very high. This is where the safety aspect comes into play.Public Liabilityor Third Party Liability is very crucial for mall managers.
If an incident occurs where a visitor is injured due to a fall during an evacuation, or a visitor’s vehicle in the parking lot is damaged by falling building materials, the mall management could face legal action. Without adequate Public Liability coverage, mall management could face:
- Victim Medical Costs:Which can swell if it involves a lot of people.
- Third Party Property Compensation:Damage to vehicles or assets belonging to visitors/contractors.
- Legal Fees:Legal defense costs if the case is brought to court by the aggrieved party.
L&G Insurance Broker ensures that mall liability insurance covers a wide coverage area, so that business operations are not disrupted by energy- and financial-draining lawsuits.
L&G Insurance Broker: More Than Just Selling Policies
When facing a risk as big as a mall fire, you don’t just need an insurance salesman, you need an insurer.Risk Management PartnerL&G Insurance Broker is here to bridge the gap between customer needs and the complexity of insurance company regulations.
1. Policy Optimization & Competitive Premium Rates
We help you conduct risk audits to find the most relevant policy extensions. L&G has a broad portfolio with Tier-1 insurance companies, allowing us to negotiate more competitive premium rates without compromising on the quality of coverage.
2. Claims Advocacy
This is our key difference. When tragedy strikes, you don’t have to fight insurance company bureaucracy alone. The L&G claims team will:
- Accompanying the Survey:Being at the fire scene togetherLoss Adjusterto ensure every detail of the damage is properly documented.
- Technical Negotiations:Argue professionally regarding the interpretation of policy clauses that are often grey areas.
- Speed Up Payments:Ensure the administrative process runs efficiently so that compensation funds are disbursed quickly so that the business can immediately carry out recovery.
Additional Risk Management Recommendations for Mall Ecosystems
Learning from the February 17 incident, L&G provides additional protection recommendations that are mandatory for business continuity:
- Business Interruption Insurance:A fire may only last a few hours, but repairs could take months. This insurance covers the loss of gross profit while the mall or store is closed. Without it, you lose revenue but still face fixed costs like employee salaries and bank interest.
- Machinery Breakdown:Protect vital assets such as elevators, escalators, and the mall’s very expensive air conditioning (chiller) systems from the risk of damage due to electrical disturbances or extreme heat.
- Money Insurance:Considering the high cash transactions during big celebrations, this insurance protects money at the cashier (cash in safe) or when sending to the bank (cash in transit) from the risk of robbery or fire.
Physical Mitigation Steps: Prevention Before Paying Premiums
In addition to financial protection, physical mitigation is the first line of defense. L&G advises property managers to:
- Tenant Electrical Installation Audit:Especially for F&B tenants that use high electricity and gas consumption. Ensure that the cables used comply with SNI standards and that there is no overloading).
- Detection System Update:Considering the mall ceiling is very high, use a laser-based smoke detector or aspiration system which is able to respond to smoke particles in seconds before the fire grows bigger.
- Periodic Evacuation Simulation:Train security staff and tenant employees to calmly direct crowds, which will directly reduce the potential for claims of public liability due to panic.
Conclusion: Don’t Wait for Disaster to Come
The Ciputra Cibubur Mall fire during Chinese New Year 2026 is a bitter lesson in the importance of maximum protection. During the transition period between Chinese New Year and Eid al-Fitr, when inventory accumulation in warehouses and stores is at its peak, having accurate insurance coverage is the only way to sleep soundly.
The operational and financial security of your shopping center is a non-negotiable investment. Don’t let years of hard work be wasted in a matter of hours due to negligence in choosing protection.
Secure your business future now with a trusted risk management partner.
To get in-depth risk analysis, the best risk management design, the most efficient premium rates, and comprehensive claims assistance, contact us L&G Insurance Broker now at: WhatsApp/Phone: 0811-8507-773
Let’s build a more resilient and risk-free Indonesian retail ecosystem.
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Website: lngrisk.co.id
Email: halo@lngrisk.co.id
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