Imagine you’re a Chinese businessman who has just completed construction of a coal-fired power plant (PLTU) in one of Indonesia’s provinces. The project is worth hundreds of millions of dollars. The project is progressing well, and the turbines made by a renowned Chinese manufacturer are operating flawlessly—until one day, during the final phase.commissioning, a small explosion occurred in the boiler system.
As a result, the project was stalled for three months, operating losses ballooned, and insurance claims were quickly filed. However, after months of waiting, the bad news arrived:
“Sorry, your claim cannot be paid, because the policy does not cover the risk of damage due to technical testing errors.”
Shock, disappointment, and even anger—these are common reactions among Chinese entrepreneurs investing in Indonesia’s energy sector. They feel the insurance process here is far more complicated than in China. In fact, the problem isn’t with the Indonesian system, but with how they choose the insurer to handle their projects.
A Common Fatal Mistake: Relying on Agents or Acquaintances
Many Chinese businesspeople in Indonesia prefer to use local agents or personal acquaintances to arrange insurance matters. Unfortunately, they often don’t realize that the agents represent the insurance company, not the customer.
Agents will focus on selling products that are easy to approve and quick to issue, rather than ensuring the best possible protection for your project. As a result, many policies:
- Does not cover full construction risks (Construction/Erection All Risks),
- Does not contain important clauses such as Testing & Commissioning Clause, Cross Liability, or Third Party Liability,
- And even worse, it is not prepared according to the EPC contract or the lender’s (bank/financier’s) provisions.
Only when major damage or project delays occur do entrepreneurs realize: their policy doesn’t cover all the risks it should.
Case Study: Failed Claims for Coal-Fired Power Plant and Solar Power Plant Projects
Several years ago, a Chinese energy company built a 2 x 150 MW coal-fired power plant in Kalimantan. During the construction process…testingOne of the turbines failed due to excessive gas pressure, resulting in losses of $2 million.
However, their claim was rejected on the grounds:
“The policy does not cover damage resulting fromoperational error during testing phase.”
Upon further investigation, it turned out the policy was prepared by a local agent without involving an OJK-approved insurance broker. The agent simply copied the standard format without ensuring it matched the EPC contract.
In contrast, in another case—a solar farm project in Central Sulawesi—a Chinese developer used L&G Insurance Broker to arrange their insurance. L&G surveyed the site, evaluated the technical risks, and prepared a comprehensive policy recommendation with specific clauses for the solar panels, batteries, and inverter system.
When a major storm hit the project area and damaged part of the installation, L&G immediately helped prepare the claim report, negotiate withloss adjuster, until the claim funds are paid in full in less than 60 days.
There is only one difference: official insurance brokers side with the insured (customer), not the insurance company.
Understand the Important Role of OJK-Registered Insurance Brokers
Many foreign entrepreneurs do not know that in Indonesia, the Financial Services Authority (OJK) regulations strictly regulate the roles and responsibilities of insurance brokers.
According to POJK No. 69/POJK.05/2016 and POJK 24/2023, brokers are required to:
- Defending the interests of the insured party (customer),
- Develop an insurance program that best suits the project risks,
- Negotiating premium rates and policy terms,
- And accompany until the claim is paid.
Meanwhile, insurance agents play the opposite role: they represent insurance companies and are oriented towards selling products.
Therefore, the OJK prohibits agents from handling the insured’s interests independently. Businesses who don’t understand this often fall into the trap of ultimately bearing significant losses themselves when claims fail.
Fast and Secure Digital Processes in the Modern Era
Some Chinese entrepreneurs might think that using a broker will slow down the process. In fact, the opposite is true.
Authorized brokers such as L&G Insurance Broker are now adopting end-to-end digital services:
- Risk analysis and recommendations are done online,
- Policy documents can be verified digitally,
- Claims communication is done through a cloud-based tracking system.
This way, there are no more language misunderstandings, lost documents, or protracted processes. Everything is recorded and transparent, according to OJK standards.
L&G Insurance Broker: A Trusted Partner for Energy Projects from China
L&G Insurance Broker is an official and registered insurance broker with the OJK and has experience handling large projects in the energy, construction, and infrastructure sectors throughout Indonesia.
Some of L&G’s advantages:
- Experienced in assisting EPC contractors from China and Korea,
- Mastering underwriting techniques for CAR/EAR, Industrial All Risks, and Delay in Start-Up (DSU) policies,
- Local and international teams that understand cultural, language and regulatory differences,
- And has a good reputation in settling large claims up to hundreds of billions of rupiah.
L&G also provides training and mentoring to local staff or translators from Chinese entrepreneurs, so that they understand the insurance process according to Indonesian regulations.
Important Message for Local Employers and Staff
For staff or translators who are trusted to take care of insurance by your boss who is from China, your responsibility is big.
If you choose the wrong party, the consequences can be fatal — projects stalled, contracts with lenders disrupted, and even the company’s reputation ruined.
Choose a partner who has official permission from the OJK, has an experienced technical team, and is ready to assist until the claim is resolved.
Conclusion: Don’t Wait Until It’s Too Late
Your investment in Indonesia is a major commitment. However, one small mistake in insurance management could wipe out years of hard work.
Don’t let your claim fail just because you chose an unlicensed agent or acquaintance.
Use an official insurance broker registered with the OJK, such as L&G Insurance Broker, which fully supports your interests—the Chinese entrepreneurs who are building Indonesia’s energy future.
—
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
—
