Workshop business insurance This is a protection often overlooked by workshop owners, despite the significant risks involved. From fires and equipment damage to spare parts theft to damage to customers’ vehicles, all of these can result in losses ranging from hundreds of millions to billions of rupiah.
This article fully explains the risks of a repair shop business, the types of insurance that must be owned, and the reasons why purchasing it must be done through an OJK-approved insurance broker such as L&G Insurance Broker.
If you are the owner of a car, motorcycle, body repair, tuning, detailing, or industrial machine workshop, you can have a free consultation with L&G via:
Whatsapp: 0811-850-7773
Email: halo@lngrisk.co.id
What is Workshop Insurance?
Workshop business insurance is a protection package specifically designed for workshops, whether they operate automobile, motorcycle, or industrial repair shops. It covers not only the building but also work equipment, machinery, spare parts, chemicals, and even customer vehicles being serviced.
With this insurance, losses from fire, theft, compressor explosions, accidents during test drives, and even customer lawsuits can all be covered by the insurance company. The concept is simple: when risks arise, your business remains financially secure.
In Indonesia, the need for insurance for workshops is actually very high because the work environment is generally fraught with risks—involving fire, electricity, fuel, oil, and heavy equipment. Without proper coverage, a single incident can be enough to bring a business to a complete standstill.
Main Risks Faced by Workshop Businesses
A workshop is more than just a place for vehicle repair. It’s a highly technical workspace with significant potential for danger. Here are some common real-world risks:
- Fire
Fire is the number one risk in the repair industry. Causes vary: electrical short circuits, welding sparks, fuel spills, and even compressor misuse. Losses can include buildings, customer vehicles, work equipment, spare parts, and important documents.
- Compressor Explosion & Technical Equipment
Unmaintained compressor engines can explode and cause structural damage and injuries.
- Theft
Workshops are often targets for theft, especially expensive spare parts and specialized equipment such as scan tools, impact wrenches, and detailing equipment.
- Damage to Customer Vehicles
For example, a car might be scratched, fall off a lift, catch fire, or be lost while parked in a repair shop. These are often the source of lawsuits.
- Employee & Visitor Injuries
Spilled oil, falling equipment, or welding activities can cause serious injuries.
- Installation Error / Human Error
Technician errors in installing brakes, tires, or engine components can lead to fatal accidents. Repair shops can face legal action.
Without insurance, the workshop owner must bear all these risks 100% of the time. Even minor damage can disrupt the business’s cash flow.
Why Should Workshops Have Insurance?
Having garage insurance is no longer an option, but a necessity. Here’s why:
- Protecting Business Assets
Buildings, tools, machinery, and spare parts are a workshop’s primary assets. If they are lost or damaged, the replacement costs are substantial.
- Avoiding Lawsuits
The workshop is responsible for the safety of the customer’s vehicle while it is on the premises. If it is damaged or lost, the owner can sue.
- Maintaining Consumer Trust
An insured workshop demonstrates professionalism. Customers feel more secure entrusting their vehicles to it.
- Maintain Business Continuity
Without insurance, a single disaster could permanently bankrupt a repair shop. With insurance, the business can continue operating after an incident.
- As Part of Modern Risk Management
As workshop competition becomes increasingly fierce, having formal protection is a strategic step to ensure your business remains sustainable and scalable.
Types of Insurance a Workshop Needs
The following types of protection are generally required by workshop business insurance:
- Property All Risks (PAR)
Protect workshop buildings, equipment, machinery and stock from fire, explosion, theft, flood and other risks.
Suitable for:
Car, motorbike, body repair, detailing, tuning, and industrial machine workshops.
- Garage Keeper Liability (GKLL)
Protects customer vehicles while in the workshop area, including damage due to technician negligence, fire, or theft.
Sample case:
Customer’s car fell off a car lift → Insurance paid for the damage.
- Public Liability Insurance
Covers third-party lawsuits, such as visitor injuries or damage to other people’s property.
- Machinery Breakdown
Covers damage to heavy workshop equipment such as compressors, car lifts, balancing machines, dyno tests, etc.
- Workers’ Compensation / JKK JHT
Protection for employees in the event of injury, disability, or death while working.
- Motor Insurance (Test Drive Cover)
Covers the vehicle used by the technician for the test drive in the event of a collision or accident.
- Money Insurance
Protecting workshop money, both cashier and money delivered to the bank.
- Fire Insurance + RSMDCC
Special package to protect against riots, civil commotion and sabotage.
With the right combination of packages, the workshop can be protected from all major risks comprehensively.
What are the benefits of workshop insurance?
Financial Benefits
- Reduce major losses due to disasters.
- Maintaining cash flow stability.
- Giving owners space to focus on operations, not risk.
- Protect work tools whose value increases every year.
Legal Benefits
- Guarantee protection against customer claims.
- Provide a sense of security to visitors and employees.
- Assisting workshops in meeting operational and audit standards from leasing or corporate fleet partners.
Without this protection, workshop owners must bear all the losses themselves—which can reach hundreds of millions to billions of rupiah.
Common Mistakes Workshop Owners Make in Managing Risk
Many workshop owners underestimate the risks, believing they’ve been “safe all along.” However, the following common mistakes often lead to significant losses:
- Not knowing that the customer’s vehicle is the workshop’s responsibility.
- They pretended a small fire didn’t happen, even though the workshop was full of flammable materials.
- Not having asset documentation makes it difficult to claim.
- Buying cheap insurance without understanding the exclusions.
- Not using an official broker can result in complicated or failed claims.
- Thinking that damaged equipment can be repaired by yourself, even though the cost of spare parts is very expensive.
Proper risk management always starts with financial protection, and that can only be achieved through insurance.
Purchase Workshop Insurance Through an Official Broker Registered with the OJK
Official insurance brokers licensed by the OJK have professional responsibilities to:
- Analyze workshop risks objectively
- Choose the best policy from various insurance companies
- Adjust the policy, wording, and coverage value to suit your needs.
- Assist with the claim process until completion (this is the most important!)
- Protecting customers from substandard products
Many workshop owners fail to claim because they purchase their own policies without expert guidance. With a licensed broker, you get the right protection, tailored to the risks involved.
Why is L&G Insurance Broker the Best Choice?
As an insurance broker that is 100% officially registered with the OJK, L&G has decades of experience handling industrial and automotive risks, including large workshops, small workshops, and fleet companies.
L&G Advantages:
- Free consultation
- No additional fees (brokers are paid by the insurance company)
- Access to various leading insurance companies
- Detailed workshop risk analysis
- Claim assistance until completion
- Strong reputation in the automotive and heavy equipment industry
If you want true, reliable, and regulated workshop protection, L&G is the best partner.
Conclusion
Own workshop business insuranceIt’s not just about compliance, but also a crucial step in safeguarding your business continuity from significant financial risks. Fire, theft, damage to customer vehicles, and even lawsuits can occur at any time. By choosing the right type of insurance and purchasing through an OJK-approved broker like L&G Insurance Broker, you’ll receive comprehensive, legal, and reliable protection.
Don’t wait for disaster to strike before seeking protection. Secure your workshop now before it’s too late.
ContactL&G Insurance Brokerfor a FREE consultation!
Email halo@lngrisk.co.id
