Friend Liga Asuransi Indonesia is once again in mourning following major riots that have caused material and social losses. As a blog focused on risk management and insurance, we will delve deeper into this event and the importance of financial protection. If you found this article helpful, please share it with your friends and discover hundreds of other interesting articles on risk management, insurance, and business protection solutions only at Liga Asuransi.
August 2025 will go down as one of the darkest periods in Indonesia’s socio-political history. A wave of demonstrations that initially focused on rejecting increases in allowances for members of the House of Representatives (DPR) quickly escalated into nationwide riots. Mass demonstrations took place in various cities—from Jakarta, Medan, Bandung, to Makassar—with widespread impact: DPRD buildings were burned, officials’ homes were looted, public facilities were damaged, and shopping centers were razed to the ground.
The riots claimed lives, including the death of Affan Kurniawan, an online motorcycle taxi driver who was hit by a police vehicle during a demonstration. The incident sparked public anger and escalated the unrest in several areas. The tragedy culminated in a fire at the Makassar Regional People’s Representative Council (DPRD) building, which claimed three lives, while the homes of Finance Minister Sri Mulyani and House Speaker Puan Maharani were also targeted by the mob. Furthermore, public property was also destroyed and lost in the chaos.
The question arises: are individuals and business owners prepared to bear the losses resulting from riots of this magnitude? The reality on the ground is that many parties lack adequate financial protection. In situations like this, Riot Insurance is a crucial solution to minimize losses, maintain business continuity, and provide a sense of security amidst social uncertainty.
What is Riot Insurance?
Riot Insurance, often referred to internationally as Riot, Strike, and Civil Commotion (RSCC) Insurance, is a form of financial protection specifically designed to cover losses resulting from riots, strikes, looting, malicious acts by groups, and other social unrest. This product fills the gap in coverage not covered by standard policies such as fire or property insurance.
In many cases, business owners and individuals assume that their property insurance automatically covers risks resulting from riots. In reality, standard policies typically only cover fire, lightning strikes, explosions, and certain natural disasters. Risks resulting from riots or looting are excluded unless the policyholder knowingly adds Riot Insurance coverage.
Coverage includes damage to buildings, warehouses, shops, factories, vehicles, and merchandise due to mob violence. Some policies even extend coverage to include terrorism and sabotage, which are increasingly relevant in today’s geopolitical context.
In other words, Riot Insurance is more than just a supplementary policy, but a vital tool for asset owners to maintain business continuity. This protection ensures that when riots cause unexpected losses, asset owners are not left to bear the financial burden alone.
Facts about the August 2025 Riots
The riots that rocked Indonesia in August 2025 were no small event. They began as demonstrations against what they deemed an unfair increase in allowances for members of the House of Representatives (DPR), and then escalated into nationwide unrest with widespread impact. Here’s a summary of key facts that demonstrate the extent of the riots’ escalation:
Early Dates & Chronology
On August 25, 2025, student and worker demonstrations in Medan marked the beginning of a wave of protests. The main demand was the cancellation of the House of Representatives (DPR) allowance increase, which was deemed excessive amidst the difficult economic conditions.
Distribution to Various Cities
- August 27: Students in Pontianak stormed the DPRD building, resulting in 15 arrests.
- August 28: Demonstrations around the DPR/MPR Building, Jakarta, turned violent after provocation.
- August 29: The tragic death of Affan Kurniawan, an online motorcycle taxi driver, who was hit by a Brimob vehicle, sparked widespread anger and increased riots in various cities.
Peak of the Riots
- August 30: The Makassar Regional People’s Representative Council (DPRD) building was set on fire, killing three people and injuring several others. Similar incidents also occurred in Pekalongan, Cirebon, and Mataram.
- August 31: Mobs stormed the homes of officials, including the home of Finance Minister Sri Mulyani in Bintaro and the home of House of Representatives Speaker Puan Maharani, the homes of House of Representatives members Ahmad Sahroni, Eko Patrio and the properties of artists such as Nafa Urbach were also looted.
Scale of Loss
Hundreds of shops were destroyed, warehouses looted, public facilities damaged, and transportation disrupted.
The estimated losses reached trillions of rupiah, covering the trade, property and logistics sectors.
These riots demonstrate how vulnerable society and the business world are to social unrest. These incidents are not merely political issues but also have a direct impact on economic sustainability and the security of community assets.
Impact of Riots on Businesses and Individuals
The riots that occurred in August 2025 dealt a severe blow not only to the government and security forces, but also to the business world and the wider community. The impact was widespread, extending beyond the physical losses visible on the surface. Here are some of the main impacts:
Direct Financial Loss
Thousands of businesses, from small shops to large shopping malls, suffered losses due to vandalism and looting. Warehouses and factories lost inventory, operational vehicles were burned, and office facilities were severely damaged. These losses amounted to not only billions but also trillions of rupiah nationally.
Operational & Supply Chain Disruptions
Many companies were unable to operate normally for days or even weeks. Deliveries were halted, logistics distribution was disrupted, and client contracts were disrupted. This situation resulted in increased costs and lost revenue.
Reputation Risk & Consumer Trust
Companies that fail to recover quickly after a riot lose the trust of customers and investors. In the long run, a tarnished reputation is more difficult to repair than material losses.
Social & Psychological Impact
Thousands of workers lost their jobs as their employers closed down. Communities surrounding the riots experienced trauma, fear, and a reduced sense of security. This situation impacted productivity and social stability.
The August 2025 riots are proof that the impact of unrest is not only damaging buildings and goods, but also threatens business continuity, economic stability, and public welfare.
Why is Riot Insurance Important?
The August 2025 riots opened many people’s eyes to the fact that the threat of unrest is not merely a fleeting political issue, but a real risk that can destroy businesses and individual lives. In a matter of hours, assets built over years can disappear without a trace. This is where riot insurance becomes crucial, not merely as a supplement, but as a fundamental requirement in risk management.
Closing Protection Gaps Not Covered by Standard Policies
Fire or property insurance policies generally don’t cover losses resulting from riots, looting, or strikes. Without specific coverage extensions, the resulting losses must be covered out-of-pocket. Riot insurance exists to fill this significant gap.
Providing Financial Certainty
When a business suffers damage due to mob violence, insurance claims funds can be used to repair assets, replace lost stock, and continue operations. This prevents bankruptcy due to significant losses.
Increasing Investor and Business Partner Confidence
Companies with riot insurance policies increase their credibility with investors and business partners. They are perceived as prepared to face extreme risks and capable of maintaining business continuity in any situation.
Providing Psychological Peace
Insurance isn’t just about money; it also provides a sense of security for business owners, employees, and families. When social risks loom, having protection provides reassurance that significant losses won’t be borne alone.
In other words, Riot Insurance is a strategic instrument to ensure that businesses and individuals remain resilient despite facing turbulent situations.
Types of Risks That Can Be Protected
Riot insurance is designed to provide more specific coverage than standard policies. This coverage addresses various potential losses arising from riots, looting, and even malicious acts by groups. The following are the types of risks generally covered:
Physical Properties
Office buildings, shops, warehouses, hotels, shopping centers, and factories can be protected from damage caused by vandalism, fire, or mob stoning. Both structural and interior damage are covered according to the insured value.
Merchandise and Inventory
Stock, production machinery, raw materials, and office inventory are often prime targets for looting. Riot insurance can cover losses for lost or damaged items.
Operational Vehicles
Logistics trucks, heavy equipment, and even company cars that are damaged or burned during riots can be claimed if they are covered by an extended policy.
Production Equipment and Electronics
Industrial machinery, computers, servers and other electronic devices damaged by mob attacks can be covered by a Riot policy.
Indirect Financial Loss
Some policies provide coverage for business interruption, which covers loss of income due to business being temporarily stopped due to riots.
Additional Warranty Extension
- Terrorism and Sabotage: relevance in the modern geopolitical situation.
- Labor Unrest (Strike): protecting assets when a strike results in destruction.
- Malicious Damage (Evil Acts): includes destruction by certain individuals or groups.
With this broad coverage, Riot Insurance not only focuses on physical damage to buildings, but also covers a wider chain of risks, so that policyholders truly get comprehensive protection.
How Does Riot Insurance Work?
For many people, insurance often sounds complicated. However, the principle of riot insurance is actually simple: you pay a premium to receive financial protection if a riot or civil commotion causes damage to your assets. Here’s how it works:
Premium Payment
Policyholders pay premiums based on the value of the assets protected and the level of risk. The higher the potential for unrest in a location, the higher the premiums. However, this cost is relatively small compared to the potentially significant losses that could occur.
Coverage Valid During the Police Period
The policy is valid for a specified period (usually one year). During this period, the insured assets—whether buildings, shops, warehouses, or merchandise—are protected against the risk of riots, looting, strikes, or malicious acts by groups of people.
The Riots Occurred
If assets are damaged or lost due to a riot, policyholders can immediately report the incident to the insurance company. This report usually requires supporting documentation such as a police report, photos of the damage, and proof of ownership.
Claim Process
The insurance company will conduct a survey and verify the loss. Once the claim is approved, payment will be made according to the insured amount stated in the policy, minus the deductible (the portion of the loss borne by the policyholder).
Example Scenario
For example, an electronics store with assets worth Rp 10 billion is severely damaged in a riot. If the store owner has full coverage for riot insurance, the insurance company can cover repair costs of up to billions of rupiah, preventing the owner from having to close down due to significant losses.
With this system in place, Riot Insurance provides a real financial safety net, ensuring policyholders can quickly bounce back after a riot.
Case Study: The August 2025 Riots
The riots of August 2025 served as a stark example of the importance of riot insurance for both businesses and individuals. Numerous cases emerged across various cities, highlighting the significant disparity between those with insurance coverage and those without.
The Case of Malls and Shopping Centers
A shopping mall in Jakarta experienced widespread looting. Hundreds of stores were damaged, merchandise was lost, and security systems were crippled. Building owners with extended riot insurance were able to file claims for facility repairs and tenant losses. However, many tenants without additional protection were forced to cover their losses themselves, and some were even forced to close their stores permanently.
Warehouse Case in Makassar
On August 30, 2025, a mob burned down the Makassar Regional People’s Representative Council (DPRD) building. In the surrounding area, a logistics warehouse was affected by the riots: walls were burned, logistics vehicles were damaged, and stock was lost. The warehouse owner, who had standard fire insurance, could not claim for the riots. If they had added riot insurance, tens of billions of rupiah in losses could have been recovered through a claim.
Personal Property Cases
The looting of state officials’ homes, including the Minister of Finance’s house in Bintaro, has drawn attention. However, residents’ homes in the surrounding area have also been targeted by mob violence. For individuals with property insurance with riot coverage, damage to their homes and contents can be covered. Conversely, those without coverage face a heavy financial burden for renovations.
Difference in Results
From the cases above, it’s clear: those with insurance coverage can recover more quickly, resume business, and recover. Meanwhile, those without coverage often lose business capital, reputations, and even livelihoods.
The August 2025 riots served as a bitter reminder that social risks cannot be underestimated. Riot insurance is a vital tool for mitigating the impact of losses, both on an individual and corporate scale.
The Role of Insurance in Economic Stability
The August 2025 riots not only caused losses for individuals and businesses but also disrupted national economic stability. In this context, riot insurance plays a crucial role in keeping the economy moving despite the social unrest.
Supporting Faster Economic Recovery
Businesses protected by insurance can quickly seek compensation, repair facilities, repurchase inventory, and resume operations. This reduces the impact of a micro-recession, which could spread if many businesses close down due to significant losses.
Protecting the Workplace
When companies are able to recover more quickly, the workforce is automatically retained. Imagine if thousands of companies closed due to losses caused by riots, unemployment would skyrocket. With insurance coverage, many companies are able to retain their employees.
Increasing Investor Confidence
Both foreign and domestic investors need assurance that their capital is secure. Protection instruments like riot insurance provide them with risk mitigation, ensuring they remain confident in investing in Indonesia despite the recent unrest.
Reducing the State Burden
If losses due to riots are not covered by insurance, the government is usually the last resort for victims. The presence of the insurance industry reduces the government’s fiscal burden, as losses are directly covered by financial protection mechanisms through insurance companies.
Enhancing National Economic Resilience
Insurance acts as a buffer, preventing social upheaval from directly destroying the economic foundations. With adequate protection, Indonesia can maintain macroeconomic stability even when faced with significant social risks.
In short, Riot Insurance is not only an individual or corporate matter, but also an important instrument in maintaining market confidence, business continuity, and national economic stability.
Tips for Choosing Riot Insurance and the Important Role of Insurance Brokers
Deciding to purchase riot insurance is a wise move, but the next challenge is choosing the right policy. Not all insurance products offer the same coverage, and clauses and conditions can often be confusing. Therefore, both business owners and individuals need to be careful when making their choice.
Tips for Choosing Riot Insurance
- Choose a Reputable Insurance Company. Ensure the insurance company has a good reputation, is financially sound, and has experience handling riot claims. This is crucial to avoid delays in your claim in the future.
- Adjust the Insured Amount. Correctly calculate the value of the assets you want to protect—buildings, stock, machinery, and vehicles. Too little insured amount can result in insufficient compensation to cover actual losses.
- Pay attention to additional clauses. Coverage extensions such as Terrorism & Sabotage, Strikes, or Malicious Damage can be crucial, depending on your location and type of business.
- Understand Deductibles and Exclusions. Every policy has provisions regarding deductibles (minimum out-of-pocket losses) and excluded risks. Understanding these from the outset will prevent disappointment when making a claim.
- Compare Multiple Offers. Don’t rely on just one offer. Compare multiple options to get a competitive premium with the best coverage.
The Important Role of Insurance Brokers.
This is where the role of an insurance broker becomes vital. Brokers act as independent consultants on behalf of the client, not the insurance company. They help ensure that your specific needs are fully met.
Risk Analysis:
The broker will analyze your business risk profile to determine the appropriate type and amount of protection.
Access to Multiple Insurance Companies:
With a wide network, brokers can compare products from different companies, then negotiate the best premiums.
Claims Assistance: When a riot occurs and you need to file a claim, the broker acts as both a companion and an advocate, ensuring the claims process runs smoothly and fairly.
Customized Solutions:
Every business is different. A broker can help design a riot insurance program that fits your company’s size and needs.
With the support of an insurance broker, you not only purchase a policy, but also receive comprehensive risk management services that can save your business in times of crisis.
One of insurance broker L&G Insurance Broker, Indonesia’s leading insurance provider, is your trusted partner in managing business risks. With extensive experience across various industries and the support of a team of experts, L&G Insurance Broker is ready to provide the right riot insurance solutions, the best premium negotiations, and maximum claims assistance. With L&G Insurance Broker, your assets are safer and your business continues.
