Many contractors still think, “Oh, heavy equipment insurance is expensive. I’ll just move on to the next project.”
In fact, if you want to calculate using simple logic, the CPM insurance premium is only a tiny fraction compared to the risks you bear every day in the field.
Just imagine, you own an excavator worth Rp1.5 billion. If it rolls over, catches fire, or is severely damaged by flooding, the repair costs could reach hundreds of millions. But if you buy CPM insurance, you only need to pay around IDR 10–12 million per year for full protection.
It’s really cheap compared to the losses, right?
The problem is, many contractors only think about the premium price, but forget that what is far more important is who accompanies you during a claim.
Well, this is the difference between buying insurance through a broker like L&G Insurance Broker compared to an agent or directly from an insurance company.
A broker doesn’t just sell policies. They stand on your side, representing your interests from the time the policy is issued until the claim is paid.
If you buy through an agent, they’ll only help you in the beginning. But when a claim arises, you’re usually on your own.
Meanwhile, brokers like L&G have a team of experts who understand the technical aspects of policies, how to process claims, and can negotiate directly with insurance companies to ensure your claim is approved quickly and in full.
Want to know how much your heavy equipment premium will be if insured?
Just have a free consultation with the team L&G Insurance Broker on WhatsApp 08118507773 or email to halo@lngrisk.co.id
We help calculate the most efficient CPM insurance premium and the most complete guarantee for your heavy equipment.
What is CPM Insurance and Why Do Contractors Need It?
Contractor’s Plant & Machinery (CPM) insurance is a type of policy that protects heavy equipment from physical damage due to accidents, fire, theft, or natural disasters.
This policy is very suitable for contractor companies, equipment renters, and project owners who use heavy equipment such as excavators, bulldozers, cranes, graders, dump trucks, and the like.
With CPM insurance, you can sleep easier knowing that if something bad happens in the field, your equipment is covered by insurance.
Without CPM, you bear all the risks yourself. And even a single piece of heavy equipment failure can immediately disrupt a project’s cash flow.
Factors Affecting the Amount of CPM Insurance Premiums
Before you look at the number simulation, it’s important to first know what determines the size of the CPM insurance premium:
- The value of heavy equipment – the more expensive the equipment, the higher the premium because the risk of claims is also greater.
- Types of equipment and their use – equipment that works in difficult terrain such as mines or swamps has a higher risk than in ordinary project areas.
- Project location – areas prone to flooding, landslides, or far from major cities can cause premiums to increase slightly.
- Age of heavy equipment – older equipment (more than 10 years) is usually considered to be at greater risk of damage.
- Company claims history – if you make frequent claims, insurance companies may assess your risk as higher.
In general, the CPM insurance premium rate in Indonesia ranges from 0.5% to 1% per year.
For the example below, we use a rate of 0.75%, with an additional policy fee of Rp100,000, stamp duty of Rp12,000, and other administrative fees of Rp15,000.
Simulation of Calculating CPM Insurance Premiums
Example 1: Excavator worth Rp. 1 billion
The calculation is like this:
- Tool value: Rp1,000,000,000
- Premium rate: 0.75% × Rp1,000,000,000 = Rp7,500,000
- Add policy fee of Rp. 100,000, stamp duty of Rp. 12,000, and other fees of Rp. 15,000
- Total annual premium: Rp7,500,000 + Rp100,000 + Rp12,000 + Rp15,000 = Rp7,627,000
This means you only pay around Rp. 633 thousand per month to protect equipment worth Rp. 1 billion.
It’s really cheap compared to if the equipment breaks and you have to spend hundreds of millions for repairs.
Example 2: Bulldozer worth Rp. 2.5 billion
- Tool value: Rp2,500,000,000
- Premium rate: 0.75% x Rp2,500,000,000 = Rp18,750,000
- Add policy fee of Rp. 100,000, stamp duty of Rp. 12,000, other fees of Rp. 15,000
- Total annual premium: Rp18,750,000 + Rp100,000 + Rp12,000 + Rp15,000 = Rp18,877,000
Imagine, a tool worth Rp. 2.5 billion only costs around Rp. 1.5 million per month for full coverage against fire, overturning, or theft.
Example 3: 3 units of heavy equipment totaling Rp. 4.5 billion
- Coverage value: IDR 4,500,000,000
- Rate premi: 0,75% x Rp4.500.000.000 = Rp33.750.000
- Add policy fees, stamp duty, and other fees for a total of Rp. 127,000
- Total annual premium: Rp33,750,000 + Rp100,000 + Rp12,000 + Rp15,000 = Rp33,877,000
With that total, you only pay around Rp. 2.8 million per month to protect three pieces of heavy equipment at once.
In fact, if just one unit is badly damaged, the loss could be more than IDR 500 million.
If a Claim Occurs, Who Will Help You?
Well, this is the part that often confuses contractors.
When disaster strikes, equipment is damaged, overturned, or caught on fire, who will help you handle the claim?
If you buy a policy directly from an insurance company, you have to take care of everything yourself: filling out the claim form, preparing the chronology and supporting documents, communicating with the adjuster, and waiting for the decision.
And often, this process is long and tedious.
Meanwhile, if you buy through a broker like L&G Insurance Broker, you don’t need to worry.
The L&G team will help from the start:
- Prepare the correct claim documents,
- Explain the chronology to the insurance party,
- Negotiate the claim value to be paid in full,
- And ensure the claim disbursement process runs quickly.
So you just focus on working on the project, let L&G handle the insurance matters.
Why Premiums Can Vary Between Contractors
Even though the base rate is 0.75%, that doesn’t mean everyone gets the same amount.
Some contractors may be able to get lower rates, depending on their risk profile.
For example:
- The project location is safe from disasters, and can get a rate of 0.6%.
- The tool is still new, it can go down to 0.5%.
- Never claim for several years, and can get additional discounts.
Well, the job of a broker like L&G is to negotiate directly with insurance companies so you can get the lowest possible rate, while still having the most comprehensive coverage possible.
Broker vs Agent: Which is more profitable?
This is a question that gets asked a lot. So here it is…
The agent works for an insurance company.
Their job is to sell policies, earning a commission on the sales. If a claim arises, agents typically don’t intervene because they don’t have the official authority to represent the insured.
While insurance brokers work for you as a customer.
Brokers are officially licensed by the OJK and are fully responsible for ensuring your policy meets your needs, premiums are competitive, and your claims are paid promptly.
In essence, a broker is a client advocate.
If there is a claim problem, the broker will go first to the insurance company to fight for your rights.
When is the Right Time to Get CPM Insurance?
There is only one answer: now!
Because risks cannot be predicted.
Heavy equipment can tip over, catch fire, or be damaged at any time, even on projects you consider the safest.
If you wait until the equipment breaks down to think about insurance, it’s too late.
Insurance only applies to future events, not to those that have already happened.
So, it’s better to prepare now before anything bad happens. That way, when risks arise, you can just sit back and relax knowing everything is covered by insurance.
Conclusion
Now you know, right?
With a rate of 0.75%, you can protect heavy equipment worth billions of rupiah at a cost much cheaper than the risks you bear every day.
Just think, a year’s CPM insurance premium might even be cheaper than the cost of an oil change for all your equipment. Plus, if you buy through a broker like L&G Insurance Broker, you’ll not only get the best price, but also a guarantee of claim support until it’s resolved. So don’t wait until disaster strikes to seek protection. Ensure your heavy equipment is protected starting today.
Want to know how much the CPM insurance premium is for your equipment?
Contact the L&G Insurance Broker team now!
WhatsApp: 08118507773
Email: halo@lngrisk.co.id
Free consultation, no fees, and you can immediately get the most efficient premium simulation for your heavy equipment needs.
Remember, you can buy insurance anywhere. But if you want guaranteed fast claim disbursement, you can only do so if you have a broker on your side.
