In recent years, the heavy equipment industry in Indonesia has experienced a significant surge. Demand for heavy equipment continues to rise, particularly in the construction, mining, and plantation sectors. This growth has encouraged leasing companies and financing institutions to become more active in supporting heavy equipment investment needs. However, the high asset values and complex operational operations present significant risks, especially for leasing companies that hold ownership of these assets.
This is where the role of insurance brokers becomes increasingly vital. Strategic collaboration between leasing companies and insurance brokers is now a primary requirement, not just an optional option. Insurance brokers help protect leasing assets, ensure financing risks are managed, and ensure project continuity despite potential risks on the ground.
This article will explore how collaboration between insurance brokers and leasing companies creates a stronger and more sustainable business ecosystem, and how this strategy will determine the future stability of the heavy equipment industry. Before risk hits your business, ensure your protection is ready. Contact L&G Insurance Broker now at 08118507773 for a free pre-risk consultation.
Conditions of the Heavy Equipment Industry and the Role of Leasing
The Indonesian heavy equipment industry recorded solid growth throughout 2024 and into 2025. According to data from the Indonesian Heavy Equipment Industry Association (HINABI), demand for heavy equipment grew by more than 15%, primarily due to the expansion of infrastructure projects and nickel mining. The Indonesian Capital City (IKN) project, new toll roads, and large-scale construction activities were the main drivers of this surge.
However, heavy equipment is not a low-priced asset—its value can reach billions of rupiah per unit. Therefore, heavy equipment leasing plays a crucial role in providing access to financing for contractors, lessees, and large project companies. With a leasing scheme, companies avoid having to purchase heavy equipment outright but can instead operate it to support ongoing projects, maintaining healthy cash flow.
Leasing Risks in the Field
Despite its advantages, the high risks of accidents, damage, or loss of heavy equipment expose leasing companies to the potential for significant losses. Because the leasing company holds ownership, any physical loss of the asset will impact the leasing company’s balance sheet. This is where insurance brokers come in, bridging the need for appropriate protection with comprehensive heavy equipment insurance products.
Why Leasing Requires Collaboration with Insurance Brokers
Many leasing companies still rely on standard coverage that doesn’t adapt to the specific conditions of heavy equipment. Yet, each piece of heavy equipment carries different risks depending on location, type of work, and operator. Insurance brokers understand these characteristics and are able to tailor heavy equipment insurance programs to the needs of leasing companies and their clients.
Some of the main benefits of this collaboration:
- Full Protection for Leasing Assets: The heavy equipment insurance policy prepared by the broker covers the risks of total loss, partial damage, and even loss, protecting leasing assets from physical loss at the mining or construction project site.
- Professional Risk Consulting: Brokers help leasing companies understand the risk profile of each project they finance, for example: landslide risk in a mine vs. impact risk in a port project.
- Fast and Efficient Claims Process: Brokers play a direct role in negotiating and settling claims with insurance companies, ensuring timely disbursement of claim funds so that heavy equipment can be repaired or replaced, minimizing downtime.
- Premium Transparency and Coverage Value: Leasing companies receive recommendations for the best products at competitive prices, helping them maintain attractive financing pricing in the heavy equipment market.
With the support of insurance brokers like L&G Insurance Broker, leasing can increase client confidence while strengthening their position in the heavy equipment financing industry.
👉 Don’t hesitate to strengthen your asset coverage. Contact L&G Insurance Broker now at 08118507773 for a free consultation before taking any risks.
Ideal Collaboration Scheme between Leasing and Insurance Brokers
Effective collaboration must begin with an understanding of each party’s role. Ideally, insurance brokers should be involved from the very beginning of a leasing client’s financing application. The ideal collaboration between a leasing company and an insurance broker is as follows:
- Initial Risk Analysis and Due Diligence: Brokers conduct a risk assessment of the type of heavy equipment, the operational location, and the project conditions. For example, an excavator used in a coal mine requires different protection than a crane used in a port project.
- Determination of Insured Value and Insurance Policy: Together with the leasing company, the broker determines the optimal agreed value of the heavy equipment, financing duration, and coverage (Heavy Equipment Insurance with special risk extensions), ensuring the policy covers the entire leasing period.
- Financing and Protection Integration: Insurance premiums can be included in the leasing scheme (single premium) to minimize customer burden. Brokers ensure the leasing company is designated as the primary Loss Payee.
- Coordination During Claims: If an incident occurs, the broker plays an active role in assisting the leasing company and the client (contractor) to ensure that claims are approved quickly and accurately, maintaining a good relationship between the leasing company and the client.
With this kind of collaboration, leasing is not only selling financing, but also a complete protection solution, which is highly valued in the Indonesian heavy equipment industry.
Relevant Insurance Types for Heavy Equipment Leasing
In the heavy equipment industry, there are several important insurance products that must be included by leasing companies to ensure maximum asset protection:
- Heavy Equipment Insurance (HEI): A primary policy that protects heavy equipment against accidents, fire, or theft while in use on projects. This is core heavy equipment insurance.
- Machinery Breakdown Insurance (MBI): Provides protection against machinery breakdown due to mechanical breakdown or internal technical faults, which are not covered by basic HEI.
- Contractor’s Plant and Machinery (CPM) Insurance: This insurance covers all risks of damage to heavy equipment used in construction projects (on-site).
- Public Liability Insurance (PLI): Provides legal protection if heavy equipment causes loss to a third party, for example an accident in a public area or property damage.
All these products can be integrated into a leasing package with the help of a professional insurance broker such as L&G Insurance Broker, ensuring there are no risk gaps in heavy equipment financing.
👉 Don’t leave your leased assets vulnerable. Contact L&G Insurance Broker now at 08118507773 for a free consultation before taking any risks.
Challenges and Opportunities for Collaboration between Leasing and Insurance Brokers
Despite its great benefits, collaboration between leasing and insurance brokers is not without challenges:
- Lack of Leasing Understanding of Protection Benefits: Some leasing companies still view insurance as an additional cost, not a long-term investment that can reduce their credit risk.
- Administrative and Data Obstacles: The process of collecting data, documents, and claims can often be challenging if there is a lack of proper coordination. Brokers must ensure that heavy equipment and project data are always up-to-date.
- Diverse Underwriting Policies: Each insurance company has different terms and conditions, so brokers must ensure that all parties receive appropriate coverage and competitive premiums.
The role of an insurance broker is to bridge communication and risk solutions so that collaboration runs efficiently and benefits both parties in the Indonesian heavy equipment industry.
Case Studies and Future Opportunities
1. Proof of Success in Strategic Projects
A real-life example comes from a nickel mining project in Sulawesi in 2024. A national leasing company partnered with L&G Insurance Broker to provide coverage for heavy equipment, including excavators, bulldozers, and dump trucks used in the mining area. When a work accident damaged two pieces of heavy equipment, the insurance broker acted quickly to assist with the claims process. In less than two weeks, the claim funds were disbursed, and the project resumed operations without financial constraints.
2. Future Trends in the Heavy Equipment Industry
Given the growing trend in the heavy equipment industry, collaboration between leasing companies and insurance brokers will become an increasingly crucial long-term strategy. Some trends that will strengthen this collaboration include:
- The surge in infrastructure projects in 2025–2030 is driving demand for new heavy equipment.
- Digitalization of leasing and insurance through an integrated platform to simplify the monitoring and claims process.
- Innovation in project risk-based protection products and telematics.
With the support of professional insurance brokers, leasing can expand its market, maintain a healthy financing portfolio, and create a more resilient business system in the ASEAN heavy equipment market.
Conclusion
Collaboration between insurance brokers and leasing companies is not merely an administrative partnership, but a crucial foundation for maintaining the sustainability of Indonesia’s heavy equipment industry. Brokers assist leasing companies in identifying, analyzing, and managing heavy equipment financing risks, while leasing companies provide access to financing that accelerates the growth of national projects. This synergy ensures that all parties, from leasing companies and contractors to heavy equipment renters, can operate with peace of mind, assured by comprehensive heavy equipment insurance.
L&G Insurance Broker is a strategic partner with over three decades of experience, ready to support leasing companies and contractors amidst the high demand for heavy equipment. L&G ensures every asset is protected by an optimal heavy equipment insurance policy, facilitates the issuance of valid project guarantees, and provides fast and efficient claims assistance. This allows leasing companies to focus on expanding their portfolios while the risk of heavy equipment damage is transferred and professionally managed.
Don’t wait until risks hit your business, causing significant losses and hindering project progress. Proactive protection is key to capitalizing on the significant opportunities in Indonesia’s booming heavy equipment industry. Take the right and strategic steps by collaborating with a trusted insurance broker.
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