When a Container Falls, the Loss Can Be a Nightmare
Imagine this: a shipping vessel from Surabaya to Batam is hit by a severe storm. High waves batter the ship, and several containers are thrown overboard. One of them contains electronic components worth over $1 million, belonging to a Chinese company that has recently expanded its operations in Indonesia.
The business owners believed all their goods were insured—until they learned their claim had been rejected by the insurance company. The reason? The policy only covered land risks, not maritime ones. The agent who helped them purchase the policy never explained this.
Ultimately, huge losses are irreparable, supply chains are disrupted, and the company’s reputation among its key clients is ruined.
Real Cases Like This Happen More Often Than You Think
In recent years, many Chinese companies have operated logistics businesses in Indonesia—whether as importers, exporters, distributors, or transportation providers. Their transaction value can reach hundreds of billions of rupiah each month.
But ironically, many of them ignore the risk management aspect, especially in terms of insurance.
They believe insurance is just a formality, or think it is enough to buy a policy from a local agent or acquaintance without checking its legality and coverage.
As a result, when incidents such as:
- The ship sank or ran aground,
- Truck overturned on toll road,
- The warehouse caught fire, or
- Items damaged due to rough handling,
Insurance claims often go unpaid — not because the insurance company refuses without reason, but because the policy was not properly drafted from the start.
Why Do Many Chinese Entrepreneurs Make This Mistake?
There are several root causes that often arise:
- Lack of Understanding of the Insurance System in Indonesia
Many foreign business owners assume that the insurance system in Indonesia is similar to that in China. However, legally, agents in Indonesia represent the insurance company, not the customer.
This means that when a claim arises, the agent is not obligated to assist you. Instead, an OJK-approved insurance broker is obligated to defend the interests of the insured (the customer).
- Ineffective Communication
In many cases, Chinese business staff or translators in Indonesia lack a thorough understanding of insurance. Misinterpretation of terms such as All Risks, Marine Cargo, or Deductible Clause can result in incorrect or incomplete policies.
- Focus on Price, Not Protection
Some entrepreneurs are tempted by low premiums without realizing that low premiums usually mean limited coverage. In logistics, one small detail in a clause can determine whether you receive full compensation or not.
The Financial Services Authority (OJK) has clearly regulated the role of insurance brokers.
The Indonesian government, through the Financial Services Authority (OJK), requires that insurance brokers be professionals who must defend the interests of the insured.
Referring to POJK No. 69/POJK.05/2016, brokers have the following main functions:
- Analyze customer needs and risks comprehensively.
- Find an insurance company with the best terms.
- Negotiate premiums and clauses for optimal protection.
- Assist in claim settlement until payment is complete.
Without a licensed broker, customers face significant risks when making claims because no one is truly on their side.
True Story: Insurance Broker Settles Large-Value Logistics Claim
One real-life example comes from a Chinese client who imported heavy equipment components for a mining project in Kalimantan.
During delivery, the delivery truck overturned on an uphill road, causing damage to goods worth more than Rp 8 billion.
Initially, the insurance company tried to reject the claim on the grounds that improper packaging And driver negligence However, because the Insurance Broker had negotiated the “Loading and Unloading Clause” and “Negligence of Carrier Covered” clauses from the outset, the claim was finally paid in full within 60 days.
This shows the real difference between purchasing a policy through a regular agent and using a licensed insurance broker who understands the risks of the logistics industry in depth.
Key Risks in the Logistics Business in Indonesia
For Chinese entrepreneurs operating in Indonesia, here are the main risks to consider:
- Physical damage to goods – due to accidents, rough handling, or extreme weather.
- Loss of goods – due to theft at ports, warehouses or in transit.
- Delay in delivery – results in contractual penalties (liquidated damages).
- Third party (subcontractor) errors – such as logistics or shipping operators.
- Legal risk (liability) – if the client’s goods are damaged while under your supervision.
All of these risks must be arranged in the right combination of policies, such as:
- Marine Cargo Insurance (sea and land),
- Warehouse Insurance,
- Carrier’s Legal Liability,
- Machinery Breakdown (for forklifts, cranes, etc.), and
- Business Interruption (for operational disruptions).
Without broker guidance, it is difficult for foreign companies to understand all the clauses and determine an effective combination.
The Digital Era: Logistics Insurance Is Now Easier and Faster
In the past, entrepreneurs considered insurance to be complicated and time-consuming. But now, L&G Insurance Broker offers a digital solution that makes it easy for Chinese entrepreneurs to manage all their insurance needs quickly and transparently.
Through an online-based system, all processes — from premium offers, negotiations, policy issuance, to claims reporting — can be done in a short time.
L&G also has a team of bilingual experts (Indonesian, Mandarin, and English) who understand the business character of Chinese entrepreneurs in Indonesia.
Important Lessons for Chinese Entrepreneurs
Many Chinese entrepreneurs have succeeded in Indonesia’s logistics sector due to their operational efficiency and precision. However, that efficiency can collapse quickly if insurance coverage is not properly managed.
Some key lessons:
- Don’t just look at the premium price, understand the contents of the protection.
- Ensure that all risks along the supply chain are covered by the police.
- Use an official insurance broker registered with the OJK to have strong legal protection and claims assistance.
Conclusion: A Licensed Insurance Broker Is a Strategic Partner, Not an Additional Expense
Using an authorized insurance broker does not mean additional costs, but rather additional protection and certainty.
In the logistics industry, where one small mistake can cost billions in losses, having a partner who understands your risks is the best form of investment.
With extensive experience, a global network, and a deep understanding of cross-cultural business, L&G Insurance Broker is ready to help Chinese entrepreneurs in Indonesia ensure that every shipment, every warehouse, and every logistics asset is fully protected and claimed without any obstacles in the event of a disaster.
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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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