Jakarta – Every year, hundreds of Chinese companies ship thousands of tons of heavy equipment, machinery, and raw materials to Indonesia. These goods form the backbone of major projects in the energy, mining, and infrastructure sectors. However, behind this smooth logistics chain lies one significant, often underestimated risk: losses from maritime accidents that are not properly covered by insurance.
1. When the Sea Swallows Millions of Dollars Worth of Goods
Early last year, a Chinese construction company imported heavy equipment worth more than USD 7 million for a construction project.power plant in Sulawesi. The goods were shipped by cargo ship from Guangzhou to Makassar.
However, en route, the ship encountered a major storm in the Natuna Sea, causing some of the containers to be thrown overboard. Several units of heavy equipment were severely damaged, and some were even lost completely.
The project team immediately filed a claim with the local insurance company through their agent. However, their claim was denied.
The reason:
- The policy only covers the risk, port-to-port, not door-to-door.
- There is no extension of the guarantee against “heavy lift cargo” or high-risk goods.
- The policy was purchased through a general agent who did not understand the technical specifications of heavy equipment.
“We were really shocked,” he said Mr. Zhang, Logistics Manager of the company.
“In China, insurance agents usually help you process claims directly. We just learned in Indonesia that if the wording is even slightly wrong, the whole thing can be canceled.”
Losses reached more than Rp 100 billion and caused project delays of up to four months.
2. Common Mistakes Chinese Entrepreneurs Make in Transportation Insurance
The case above illustrates a classic mistake often made by Chinese entrepreneurs in Indonesia in managing marine cargo insurance.
- Misunderstanding the Indonesian insurance system
In Indonesia, the roles of agents and brokers differ significantly. Agents work for insurance companies, while brokers registered with the OJK represent the insured.
When a claim occurs, agents tend to protect the interests of the insurance company — not the business owner.
- Police bought without risk analysis
Each item has different risk characteristics: heavy equipment, industrial machinery, chemicals, or high-value spare parts. Without a survey and risk analysis before shipment, there’s a high chance of gaps in the policy wording.
- Lack of communication between the Chinese team and local parties
Differences in language and business culture often lead to misunderstandings in reading policy details.
“As a translator, I often see differences in understanding,” he said Ms. Mei, project translator assigned to Makassar port.
“Many legal and technical terms are difficult to translate into Mandarin. As a result, Chinese teams sometimes sign policies without fully understanding the terms.”
3. Why OJK Establishes Official Broker Rules
To prevent such losses, the Financial Services Authority (OJK) has explicitly regulated through POJK No. 24 of 2023 that insurance brokers have the following primary functions:
- Analyze the risks and needs of the insured,
- Negotiating the best premiums and policy wording,
- Accompany the claim process until completion, and
- Protecting the interests of the insured (entrepreneur).
This means that, in the Indonesian legal system, an OJK-approved broker is not merely an intermediary, but rather a professional advisor working for the insured party.
For foreign entrepreneurs, including those from China, working with an authorized broker will ensure compliance with Indonesian law and maximum protection against business risks.
4. The Real Role of an Authorized Broker: A Case Study of L&G Insurance Broker
One example of success comes from a project to ship giant turbine components from Shanghai to East Kalimantan. The goods, valued at USD 15 million, were shipped by special vessel, posing significant risks, including: heavy lift, extreme weather, and risks-transshipment.
This project utilizes the services of an Insurance Broker, an official broker registered with the OJK. From the outset, the brokerage team has:
- Shipping route analysis to map weather and port risks,
- Negotiation of wording of marine cargo all risk policy, with additional risk and strike clause,
- Technical coordination with logistics companies to ensure shipping documentation meets claim standards, and
- Claim handling simulation so that all parties know the procedure from the start.
Several weeks later, one of the containers was damaged during unloading at the destination port. Because the documentation was complete and the policy wording clear, the claim was approved in less than 30 days.
“We don’t need to go back and forth negotiating, everything goes quickly and professionally,” he said Mr. Zhang who is also involved in the project.
“Brokers like L&G really understand how insurance works in Indonesia. We feel much safer.”
5. The Digital Era: Claims Processing is Now Faster and More Transparent
One of the important advantages of a modern authorized broker such as L&G Insurance Broker is the ability to digitalize the insurance process.
All stages — from policy application, premium comparison, delivery monitoring, to claim reporting — can now be done online through a secure digital dashboard.
The benefits:
- There is no more miscommunication between China and Indonesia,
- All documents can be translated and uploaded directly,
- Claim status can be monitored in real-time, and
- Full transparency for every stage of administration.
With this system, entrepreneurs no longer have to wait long to find out the progress of their claims or the status of their policies.
6. Financial Risks Due to Failed Claims
Losses resulting from failed cargo insurance claims can be substantial, especially on cross-border projects. The impacts include:
- Direct loss of lost or damaged goods,
- Additional replacement and logistics costs,
- Project delay fines, and
- Disruption of business relations with the project owner or main contractor.
In today’s fast-paced global business world, one failed claim can mean reputational damage and loss of investor confidence.
7. Solution: Use an Official Insurance Broker Registered with the OJK
To avoid such losses, Chinese entrepreneurs in Indonesia need to ensure that any insurance arrangements—especially for marine cargo, logistics, and transport risks—are made through an official broker registered with the OJK.
L&G Insurance Broker is one of the leading brokers in Indonesia with extensive experience in marine insurance, heavy equipment, and energy project insurance.
L&G assists clients from the initial stage to claim settlement, with a professional, transparent approach and in accordance with OJK regulations.
L&G’s flagship services include:
- In-depth risk analysis for each cargo type and route,
- Negotiate the best premiums and policy clauses,
- Professional and fast claims assistance, and
- Digital systems for efficient cross-border communication.
8. Conclusion: Don’t Wait for Losses to Happen
In the world of logistics and international trade, every shipment is a big gamble.
For Chinese entrepreneurs operating in Indonesia, understanding local regulations and using a licensed insurance broker is not only a smart decision — it’s also strategic protection for multi-million dollar investments.
“The sea can bring good fortune, but it can also swallow up your investment,” he said.Mr. Zhang.
“With a licensed broker like L&G Insurance Broker, we know our protection is real, not just a promise on paper.”
L&G Insurance Broker— an official broker registered with the OJK, a trusted partner to protect every Chinese entrepreneur in Indonesia from shipping risks, losses, and claim failures.
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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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