Every step in the business and industrial world involves significant financial risk. For companies operating in the construction, mining, oil and gas, or manufacturing sectors, the risk of claims is no longer measured in millions, but in billions of rupiah. These billion-dollar losses can arise from factory fires, heavy equipment damage, and even third-party lawsuits.
Ironically, many companies take their biggest risk at the insurance policy purchase stage, choosing the direct insurer route without the assistance of an insurance broker. Insurance brokers aren’t just intermediaries; they’re your first line of defense in ensuring your policy actually works when a major insurance claim occurs. We, L&G Insurance Broker, located in South Tangerang, are here to turn that risk into definitive protection.
The risk of billions in claims is inevitable in heavy industry. Companies that don’t use insurance brokers are vulnerable to claim denials due to flawed policy wording, underinsurance, and weak risk allocation. Insurance brokers are independent experts who act asadvocateClients, ensuring policies are designed to resist insurance claims denials and are backed by robust reinsurance. Protecting your business from billions in losses is a strategic investment.Therefore, don’t let your risks go unmanaged professionally Contact L&G Insurance Broker now in 08118507773 for consultation with our experts.
A Real Threat in Every Industry
Insurance claims at the industry level are always complex because they involve large (multi-billion) insured amounts, extensive damage, and multiple parties (surveyors, loss adjusters, reinsurers).
Billions in Claims Lurk:
- Construction Sector: Claims for structural damage (CAR/EAR), project delays, or legal liability (TPL) resulting from workplace accidents often reach tens of billions of rupiah. Policies must cover earthquake and design risks.
- Mining & Energy Sector: Claims for heavy equipment damage (CPM), fires, or landslides in pit areas can reach Rp 10–50 billion. These claims are prone to rejection if the policy does not cover specific geotechnical conditions.
- Manufacturing Sector: Fire losses to factories and machinery (PAR) plus operational losses (Business Interruption) are often claimed risks that destroy cash flow.
Without an expert Insurance Broker, the company does not have an objective risk analysis to ensure all these risks are covered in the policy wording purchased.
The Consequences of Billions in Losses Without an Insurance Broker
Losses of billions without an Insurance Broker have a direct impact on your business:
- Financial Liquidation: Large claims can liquidate a company’s cash flow if insurance refuses to pay.
- Damaged Reputation: Failure to manage insurance risks and claims damages reputation in the eyes of investors, principals, and contract partners.
- Law and Sanctions: Policies with defective wording violate risk governance standards and can potentially trigger OJK sanctions.
Top Reasons for Large Insurance Claim Denials (Wording Gap)
The most common mistake that causes billions in losses is underinsurance. Insurance brokers ensure that the sum insured reflects the true value of the assets.
What is underinsurance? The insurance value stated in the policy is lower than the actual value of the asset.
- The Average Principle: When a claim occurs, the insurance company will use the average principle, which means paying only a portion of the claim (based on the underinsurance ratio). If your assets are worth Rp 100 billion but are insured for Rp 50 billion, your claim will only be paid 50%, leaving you to cover the billions in losses.
Insurance Broker Unidentified Exceptions
Policies purchased directly from insurance companies often use standard wording that does not cover your specific risks.
- Standard Exclusions: Standard policies often exclude losses resulting from electrical short circuits, earthquakes, floods, or operator error. Insurance brokers will negotiate to add these endorsements, a crucial step in determining whether a claim is denied or paid.
- Workshop Insurance and Bailee Liability: Workshop Insurance Brokers ensure the policy covers Motor Vehicle Bailee Liability (damage to the customer’s vehicle), which is not included in standard Property All Risks policies.
Doubtful Insurance Claim Payment Capacity
For claims reaching billions of rupiah, local insurance companies rely heavily on global reinsurance. Without an insurance broker, policies are vulnerable to being placed with weak reinsurers.
- Weak Reinsurance: Small insurance companies often default on large claims because their reinsurance companies lack strong financial capacity (ratings below A-).
- Broker’s Role: L&G Insurance Brokers ensure risk placement with the best-rated international reinsurance companies, guaranteeing your insurance claim is paid in full.
The Crucial Role of Insurance Brokers in Guaranteeing Claim Payments
L&G Insurance Brokers begins the process with an in-depth Risk Audit. We don’t sell policies, but rather design policies tailored to your unique business needs in South Tangerang and throughout Indonesia.
- Independent Risk Assessment: Assesses operational risk, property risk, and liability risk objectively, not tied to a particular insurance company’s products.
- Tailor-Made Wording: Ensuring each specific risk (e.g., flooding in a mine pit area) is explicitly covered in the policy wording.
- Competitive Premium Negotiation: Benchmarking and negotiating the best premiums in the insurance market, saving on premiums without reducing protection.
Fighting for Client Rights Against Insurance Companies
An insurance broker’s value is most evident when an insurance claim occurs. L&G Insurance Brokers act as your advocate:
- Total Claim Assistance: Manages the entire insurance claim process, from incident notification to disbursement of funds.
- Dealing with Adjusters: Negotiate aggressively with loss adjusters and insurance companies to prove claims are valid and ensure maximum claim payout.
- Proving Wording: Using pre-designed policy wording to counter unfounded claim denials.
The Importance of Consulting an Insurance Broker Amidst Risk
As risks increase, companies need trusted experts. Insurance brokers are a key risk governance (GRC) requirement.
If you want to avoid the risk of devastating billion-dollar claims and ensure your policy actually works, an Insurance Broker is the first step.
If your business is growing and your assets are worth multi-billions, don’t delay any longer Contact L&G Insurance Broker now on 08118507773 to consult with our experts and secure your policy from wording defects before the risk occurs.
Securing the Policy Lifecycle: The Role of Insurance Brokers from the Start
L&G Insurance Brokers oversee the entire policy lifecycle to ensure ongoing protection.
- Policy Design: Designing an initial policy that covers all risks, including risks that may occur in the future (for example, adding Terrorism or cyber risks).
- Renewal Management: Proactively manage policy renewals (health insurance policy renewals, Property All Risks renewals), prevent protection gaps and ensure up-to-date coverage values.
- Regulatory Compliance: Ensuring that each policy meets OJK regulatory standards, guaranteeing that the policy is legally valid.
Case Study: Failed Claim of Rp 22 Billion Due to Misplaced Policy
In 2023, a major construction company in the capital city of Indonesia (IKN) had to cover Rp 22 billion in losses after its claim was rejected in its entirety. The reasons were:
- Inappropriate Policy Wording: The CAR (Contractor’s All Risks) policy does not cover damage due to structural failure that occurs at a certain stage.
- Direct Placement: Policy purchased directly without an Insurance Broker.
- Weak Reinsurance: The underwriting insurance company does not have sufficient financial capacity, and the reinsurance used is not strong.
The claim was rejected in its entirety. This incident highlights that the risk of billions in claims is real and can only be avoided with the support of an expert insurance broker.
Cover
The risk of billions in claims is the biggest threat to companies with flawed insurance policies. Neglecting to use an insurance broker means your company is voluntarily taking on fatal risks: weak policies, potential claims rejections due to flawed wording or underinsurance, and the threat of billions in losses that could devastate your business’s assets and cash flow. An insurance broker is the absolute solution to avoid these financial risks. L&G Insurance Broker guarantees your policy is designed to be claim-proof and backed by the best reinsurance.
Don’t let billion-dollar risks jeopardize your company’s operations. L&G Insurance Broker, located in South Tangerang, is ready to be your strategic partner in securing high-value assets. We provide independent risk analysis, policy design with anti-denial wording, and claims support through to completion.
Before the risk comes and your claim is rejected, Contact L&G Insurance Broker now on 08118507773 for a consultation with our experts. Protect your business with a trusted insurance broker.
