Imagine you’re leading a major construction project. Everything is going according to plan, until one morning, a major piece of heavy equipment, an excavator, suddenly slips into a ravine due to unstable soil. Over 1.5 billion rupiah worth of machinery is severely damaged, the project is halted, and the client begins to press for completion.
It was then that it became clear that not having CPM heavy equipment insurance was a very costly decision. The losses were not only to assets, but also to reputation, cash flow, and client trust.
This is a common reality in the field. Many contractors in Indonesia still underestimate the importance of heavy equipment insurance, thinking, “Oh, it’s rare.” Yet, a single disaster can wipe out profits from multiple projects.
That’s why Asuransi Contractor’s Plant and Machinery (CPM)There is financial protection specifically designed to protect heavy equipment from various unexpected risks.
As a professional insurance broker with over 40 years of experience, L&G Insurance Broker has helped hundreds of contractors and heavy equipment companies across Indonesia obtain the best protection through CPM insurance. We not only help you find the right policy, but also ensure a fast and smooth claims process when disaster strikes.
Want to know the best way to protect your heavy equipment?
Get in touch L&G Insurance Broker for free consultation via WhatsApp at 0811-850-7773.
Why Do Many Contractors Still Underestimate Heavy Equipment Insurance?
Despite the potential value reaching billions of rupiah, many contractors are still reluctant to insure their heavy equipment. Here are some common reasons often heard in the field:
- “The premium is expensive, I’ll do it later when I have a lot of projects.”
In comparison, CPM premiums are typically only 0.5–1% of the equipment’s value, while damage can be up to 100% of its value. - “So far it’s been safe.”
It’s like saying, “I don’t need a seat belt because I’ve never been in a crash.” Risk is unpredictable. - “Insurance claims are complicated.”
Claims can be complicated without the assistance of a knowledgeable broker. But with L&G Insurance Broker, the claims process can be much simpler and more transparent. - “We already have project insurance.”
This is a common misconception. Project insurance like CAR or EAR does not automatically cover heavy equipment. Only CPM heavy equipment insurance specifically covers risks to machinery and equipment.
As a result, when heavy equipment is damaged or lost, the contractor must cover all costs. And on projects with thin margins, a single incident can devastate the company’s finances.
The Biggest Risks When Heavy Equipment Is Not Insured
Here is five major risks the most common problems experienced by contractors who do not have CPM protection:
- Damage Due to Accidents in the Field
Excavators tipping over, cranes falling, and bulldozers tipping over are not uncommon occurrences on construction projects. Unstable ground conditions, operator error, or even minor negligence can lead to significant losses.
For example, an excavator worth Rp 1.8 billion was damaged after slipping into a ditch. Without CPM insurance, the contractor would have borne all repair costs. As a result, the company’s cash flow was immediately disrupted.
- Damage due to extreme weather
The rainy season in Indonesia often brings the risk of landslides and flooding. Heavy equipment in operation can become buried in mud or swept away by currents. Without insurance coverage, repairs can cost hundreds of millions of rupiah.
CPM’s heavy equipment insurance policy covers damage from external events like these, including minor natural disasters that often occur on outdoor projects.
- Fire and Explosion
Project areas often store large quantities of fuel and oil. A single spark can trigger a catastrophic fire that destroys heavy equipment. Without insurance, even totaled equipment cannot be claimed.
- Theft and Loss
Many heavy equipment projects are located far from residential areas, even in remote areas. The risk of theft of spare parts, batteries, or engine components is very high. Some cases have even involved theft of entire units.
With CPM insurance, all losses due to theft (including theft with violence) can be covered according to the policy provisions.
- Cash Flow Disruptions and Project Delays
When equipment breaks down, projects come to a halt. Every day of delay means additional costs: workers’ wages, late fees, and even the loss of client trust. Without a CPM, contractors are left to fend for themselves.
All of the risks above can cause a project to lose hundreds of millions to billions of rupiah just because of one thing: not having CPM heavy equipment insurance.
Financial Impact: One Tool Can Shake a Company’s Balance Sheet
Let’s look at a simple simulation:
A contractor company owned an excavator worth Rp 2 billion. In a field accident, the equipment was severely damaged, requiring Rp 600 million in repairs.
If it weren’t insured, the company would have to pay Rp 600 million. Meanwhile, the annual CPM insurance premium for equipment of that price would probably only be around Rp 10–15 million per year.
In other words, the premium cost is equivalent to less than 3% of the loss cost but can save the company from a major financial crisis.
The Real Benefits of CPM Heavy Equipment Insurance
Besides providing financial protection, there are many other benefits of having a CPM policy:
- Maintain project continuity.
Equipment damage does not immediately stop work because repair costs are covered by insurance. - Protecting business reputation.Clients have more confidence in contractors who are serious about risk management.
- Increase tender competitiveness.
Many large projects require CPM insurance as part of the contractor qualifications. - Provides peace of mind.
You don’t need to worry every time the tool works in difficult terrain. - Flexible and customizable.
CPM policies can be tailored to the type of equipment, project location, and duration of work.
True Story: Huge Losses Without CPM
One of our clients in Kalimantan experienced this very incident. A crane fell while lifting a load in the port area. The damage amounted to over Rp 700 million.
Initially, the client didn’t have CPM heavy equipment insurance, so they had to cover all the costs themselves. After the incident, they decided to use L&G Insurance Broker and insure all their equipment.
Several months later, another piece of equipment was damaged by a landslide. This time, the claim was successfully filed and paid in full by the insurance company. The client stated,
“If it weren’t for CPM, our project might have come to a complete halt.”
What is covered by CPM insurance?
CPM heavy equipment insurance policies cover loss or damage to heavy equipment due to external and sudden events. Some common coverages include:
- Fire, explosion, lightning strike.
- Accidents at project sites (falling, overturning, slipping).
- Landslides, floods, earthquakes, storms.
- Theft and loss.
- Human error.
In addition, you can also add warranty extension, like:
- Third Party Liability, if your device causes damage to someone else’s property.
- Risks during transportation, for heavy equipment that frequently moves project locations.
- Major natural disasters, such as earthquakes or volcanic eruptions.
An insurance broker like L&G Insurance Broker will help determine which coverage is most relevant to your needs and project location.
Tips for Choosing the Right CPM Insurance
Before purchasing a policy, please note the following important points to ensure maximum protection:
- Make sure the insurance value matches the market price of the equipment.
Avoid being underinsured, as this can result in claims not being paid in full. - Check the condition of the equipment before insuring it.
Some insurance companies require an initial inspection. - Choose an insurance company that is experienced in the construction sector.
Their experience will determine the ease of the claims process. - Use a professional broker like L&G Insurance Broker.
Brokers help compare policies from different companies so you get the best premiums and the most comprehensive coverage. - Make sure there is assistance when making a claim.
This is important so that there is no potential for claims to be rejected simply due to administrative or document errors.
L&G Insurance Broker’s Role in Protecting Your Heavy Equipment
As a heavy equipment insurance broker in Indonesia, L&G Insurance Broker not only sells police, but also becomes risk partners for clients.
Here are our important roles:
- Risk Analysis: Assess your specific equipment needs and risks.
- Design the Right Police: Adjusting the guarantee to field conditions.
- Best Premium Negotiation: Compare various offers so you get a competitive price.
- Claims Assistance: Assisting from the reporting process to the disbursement of claim payments.
With experience of more thanfour decadesand extensive network with well-known insurance companies,L&G Insurance Broker has helped many contractors avoid major losses and keep projects running.
Want to know what the best premium is for your heavy equipment?
Consult now free with our team of experts throughWhatsApp at 0811-850-7773.
Conclusion
The construction world is never without risk. Accidents, extreme weather, and even operator negligence can occur at any time, even on the most well-planned projects.
Without CPM heavy equipment insurance, all losses must be borne solely, and this can destroy a company’s finances in an instant. Conversely, with CPM, you have strong financial protection to safeguard your business continuity and your reputation with clients.
Don’t wait for disaster to strike before realizing the importance of this protection.
Immediately protect all your heavy equipment together L&G Insurance Broker.
Contact us now via WhatsApp at 0811-850-7773 for free consultation and best offers.
Because in the construction business,the protected are the ones who survive.
