That day, the L&G Insurance Broker team received a text message from a Site Manager of an Indonesian contractor working on a road project in Timor Leste:
“Sir, our main excavator is badly damaged. Local insurance only covers a small portion. The project could be halted. Can you help?”
The excavator is a vital unit in the project.
Without it, work could be delayed for weeks.
The project owner has threatened to impose penalties if the delay exceeds the tolerance limit.
The contractor also tried to use local Timor Leste insurance policies.
However… The collateral capacity is not enough.
It was at this critical point that they contacted L&G.
This situation is clear evidence that development in Timor Leste requires insurance support with greater capacity—and one of the best solutions is to use an Indonesian insurance company.
Key Challenge: Timor-Leste’s Insurance Capacity Remains Limited
Timor Leste is a young country with a big development vision.
However, their insurance industry is still in the development stage, especially in the general insurance category.
Some of the main challenges faced:
- The guarantee limit is relatively small
Engineering, energy, and infrastructure projects require large guarantee limits, typically between:
- USD 5 million – 100 million for CAR/EAR
- USD 1 million – 10 million for heavy equipment (CPM/Contractor Plant Machinery)
- USD 2 million – 20 million for Public Liability
- USD 5 million – 50 million for Marine Hull
Local capacity is often unable to meet these needs.
- Limited reinsurance
Many local insurance companies still rely on regional, rather than global, reinsurers, making limits difficult to raise.
- Complex technical risks
Projects such as:
- roads and bridges
- power plants
- energy installations
- harbor
- government facilities
requires a special underwriter who understands engineering risks.
- International policy wording is not yet common
Owners or investors often ask for more complex wording such as:
- LEG 2/3
- Vibration, Removal, Weakening
- ALoP/DSU
- MEM wording
- Principal Arranged Insurance
Not all local insurers are ready to provide this wording.
Here Indonesian Insurance Provides Solutions
An often forgotten fact is:
Indonesian insurance companies can provide guarantees for projects or assets located in Timor Leste, as long as a risk assessment and guarantee extension are carried out.
During this time, many people thought:
“If the assets are abroad, Indonesian insurance definitely won’t cover them.”
However, that is not true.
Many Indonesian insurance companies have experience covering:
- overseas energy projects
- foreign-flagged ships
- heavy equipment operating overseas
- overseas exports and installations
Including projects in Timor Leste.
With the support of experienced brokers like L&G, Indonesian insurance can provide:
- big limit
- competitive premium
- wording according to international contracts
- global reinsurer support
- professional claims process
Action Point: Why is the Indonesian Policy Legal and Safe to Use?
Project owners in Timor Leste often worry about:
“What if a claim arises? Do the Indonesian police have jurisdiction here?”
The explanation is simple.
- The police always follow the laws of the country where the police are issued.
If the policy is issued in Indonesia → then it follows Indonesian law.
There is no rule prohibiting Indonesian policies from guaranteeing assets or projects abroad.
- Claims are settled technically, not through litigation.
In practice, insurance claims are settled by:
- guarantor
- insured
- broker
- loss adjuster
Not a court.
- International arbitration is available in case of dispute.
Arbitration is the preferred method of dispute resolution in the international insurance world.
Both parties can appoint experts from any country.
- Loss adjusters can be appointed across countries
For projects in Timor Leste, adjusters can come from:
- Indonesia
- Singapore
- Australia
- Portugal
- Malaysia
- East Timor
The process remains professional and fast.
The Important Role of Insurance Brokers: L&G as a Risk Control Center
On many cross-border projects, companies are often confused:
- which policy is suitable
- what wording to use
- how claims should be prepared
- whether Indonesian insurers want to cover
- how to convince the owner of Timor Leste
This is where the role of a professional insurance broker like L&G is crucial.
- Connecting Contractors, Owners, Insurers, and Adjusters
L&G acts as a liaison explaining the legality, capacity and claims procedures to all parties.
- Prepare complete underwriting documents
Including:
- risk assessment
- engineering details
- contract documents
- asset value analysis
- hazard analysis
- Negotiate wording and rates with insurance companies
L&G ensures the policy complies with the project contract, including the terms requested by the owner.
- Ensure smooth claims processing
In the event of damage or accident, L&G:
- set loss adjuster
- prepare claim documents
- control the process until payment
- Provide trust to the Timor Leste government
That the Indonesian police have:
- strong capacity
- clear legal basis
- international reinsurer support
True Story: When L&G Saved a Road Project in Timor-Leste
Back to the broken excavator.
L&G immediately moved:
- Contacting Indonesian insurance companies with large heavy equipment capacity
- Applying for extension of guarantees to Timor Leste
- Arrange for an engineering surveyor to inspect the unit
- Explain to the project owner that the Indonesian policy is valid for use
- Negotiating CPM wording as per contract request
- Ensuring the efficiency of the claims process
The result?
- Damaged equipment is approved for replacement according to the loss adjuster’s recommendation.
- Contractors are not subject to penalties
- The project remains on schedule
- Owner is satisfied because there is a quality solution
- L&G gains greater trust from project stakeholders
This is concrete evidence that Indonesian insurance can significantly help the development of Timor Leste.
Why Should the Timor Leste Government Support the Use of Insurance from Indonesia?
There are many benefits that the government and people of Timor Leste receive when using Indonesian insurance support:
- Development is proceeding smoothly
Strong insurance ensures the project doesn’t stall.
- Country risk is more controlled
Public assets and government projects are protected.
- Investors are more confident
Certainty of guarantees attracts foreign investment.
- Transfer of knowledge and international standards
Indonesian insurance brings global standards that benefit the local industry.
- More competitive prices
The large capacity of Indonesian insurers lowers protection costs.
It’s Time to Build Regional Insurance Collaboration
Timor Leste is moving rapidly towards a future of development.
In order for a project to run safely and stably, risk protection must be commensurate with the project value.
With:
- large capacity
- global reinsurance support
- international experience
- professional claims mechanism
- and assistance from L&G Insurance Broker
Indonesian insurance is the right solution for Indonesian projects and assets located in Timor Leste.
Project security should not be limited by national lines—what matters is the quality of protection.
And this is where Indonesian insurance together with L&G is ready to be a reliable partner.
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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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Disclaimer
This article is intended for educational purposes regarding cross-border insurance underwriting practices and should not be construed as legal advice or a final recommendation for a policy. Each project has unique risk characteristics that require specific analysis by licensed insurance companies and brokers. Readers are advised to consult with professionals before making any decisions regarding insurance coverage, particularly for assets or projects located outside of Indonesian jurisdiction.
