Chinese Entrepreneurs in the Energy and Mining Sectors Suffer Huge Losses Due to Rejected Claims — Don’t Repeat This Mistake

An Energy Project That Turned Into a Nightmare

Three years ago, Mr. Chen, a businessman from Shenzhen, came to Indonesia with a big vision — to build a gas-fired power plant (PLTG) in East Kalimantan.
The project was valued at USD 50 million. He partnered with a local contractor and purchased insurance policies for the project, machinery, and liability through an “insurance agent” introduced by his partner in Indonesia.

Initially, everything went smoothly. However, in the sixth month, a small explosion occurred in one of the generator units during testing.
As a result, one machine was severely damaged, the project was delayed by three months, and losses reached more than USD 3 million.

When Mr. Chen filed a claim, the insurance company refused.
The reason:

“The policy only covers damage from major fires, not mechanical damage during the test drive.”

Mr. Chen was surprised. He thought he had paid a high premium, but the coverage turned out to be limited.
It was later discovered that the agent who had arranged the policy did not understand the characteristics of the energy project and did not add the clause.Testing and Commissioning Coverwhich is very important for this type of project.

This is where the fatal error begins.

Energy and Mining Industry = High Risk, Must Be Handled Professionally

The energy and mining sector is one of the most complex sectors in the insurance world.
The risks are high, the values ​​are high, and many parties are involved: contractors, operators, investors, and government regulators.

Some typical risks that must be insured include:

• Explosions, fires and heavy equipment damage,
• Machinery breakdown,
• Project delay (delay in start-up),
• Workplace accidents and third party legal liability,
• Environmental damage due to leaks or spills.

However, many Chinese entrepreneurs in Indonesia do not understand the correct protection structure.
They often just buy standard policies without in-depth risk analysis, relying on agents or personal acquaintances who are not licensed by the OJK.

As a result, when accidents occur, their claims often fail to be processed because the coverage does not cover the actual risks.

True Stories from Mining Projects in Sulawesi

Take PT Golden Dragon Mining Indonesia, a nickel mining company from Fujian.
They insure heavy equipment and conveyor systems through local intermediaries who claim to be “brokers”.

One day, during excavation activities, a large landslide hit part of the mining area, damaging two excavators and one dump truck.
The total loss was almost Rp. 12 billion.

When a claim was submitted, the results were rejected.
Insurance company reasons:

“The policy only covers the risk of heavy equipment accidents, not damage due to natural disasters such as landslides.”

Management was confused. They only realized that the “broker” didn’t have an OJK license and was merely acting as an informal agent with no technical knowledge.

If they had worked with an authorized broker like L&G Insurance Broker from the start, their policy would have included additional clauses such as:

• Act of God Clause(protects against natural risks such as earthquakes, floods and landslides),
• Loss of Hire Clause(covering the loss of income due to equipment stopping operation),
• And Machinery Breakdown Extension(for heavy machinery protection).

Why OJK-Registered Brokers Are So Important in This Sector

OJK specifically requires that registered insurance brokers must:

• Representing the interests of the insured (customer) — not the insurance company.
• Conduct a professional risk analysis before making recommendations.
• Accompanying customers during claims until completion.

This is especially important because energy and mining projects have multi-party contracts, often involving banks, investors and local governments.
One small mistake in a policy clause could result in billions of rupiah in losses or even months of project delays.

With a licensed broker like L&G Insurance Broker, entrepreneurs get a team of experts who understand the entire project cycle: from construction, commissioning, to operations.

L&G Insurance Broker’s Approach to Energy and Mining Projects

As an official insurance broker registered with the OJK, L&G has extensive experience handling major projects throughout Indonesia.
The approach includes:

1. Risk Identification and Field Survey.
   The L&G team reviewed the project site to understand the soil conditions, weather, equipment and operational processes.
2. Designing the Right Insurance Program.
   Including combinationspolicy like:

• Contractors’ All Risks (CAR),
• Erection All Risks (EAR),
• Machinery Breakdown (MB),
• Third Party Liability (TPL),
• Business Interruption Insurance.

1. Negotiating with Multiple Insurance Companies.
   L&G is not tied to any particular insurance company, so it can negotiate the best premium rates and the broadest coverage.
2. Full Claim Assistance.
   When an incident occurs, L&G will act as the insured’s representative — preparing documents, negotiating with loss adjusters, and ensuring claims payments are fair and prompt.

This approach has been proven to help many heavy industry clients save time, reduce costs, and obtain maximum claim payments.

The Digital Era — All Processes Are Faster and More Transparent

For Chinese entrepreneurs accustomed to digital efficiency, the good news:
L&G Insurance Broker has completely digitally transformed.

Now all processes can be done online:

• Risk consultation via Zoom or WeChat,
• Documents and policies are sent in digital format,
• Claim status can be monitored in real-time,
• And the reports are available in both English and Mandarin.

With this system, Chinese entrepreneurs do not need to come to the office or worry about distance and language barriers.
Everything is done quickly, safely and transparently.

Staff or Translator Errors Can Be Fatal

Many Chinese companies entrust insurance processing to local staff or translators.
But without technical understanding, they can easily choose the wrong policy — and have their claim rejected as a result.

In a multi-million dollar project, this mistake could be financially disastrous.
That is why the OJK emphasizes that only licensed insurance brokers may provide consulting and representation services to clients.

With L&G Insurance Broker, the responsibility of staff and translators is secure — because all recommendations and documents are prepared by certified professionals.

L&G — Strategic Partner for Chinese Entrepreneurs in Indonesia

L&G Insurance Broker has been trusted to handle various large energy and mining projects, including:

• Power plant projects in West Java and Kalimantan,
• Coal and nickel mines in Sulawesi and Kalimantan,
• As well as guaranteeing EPC (Engineering, Procurement, Construction) projects worth billions of rupiah.

As OJK official broker, L&G also has a strong reputation for:

• Transparency,
• Integrity, and
• Speed ​​of claim settlement.

For Chinese entrepreneurs, L&G is more than just an insurance provider — it’s a long-term business protection partner.

Conclusion: Don’t Wait for Big Losses to Happen

The story of Mr. Chen and PT Golden Dragon Mining is just a small part of the many Chinese entrepreneurs who suffered huge losses due to choosing the wrong insurance agent.
All of this can be avoided if you use an official insurance broker registered with the OJK from the start.

With L&G Insurance Broker, you get:
✅Protection tailored to real risk,
✅Competitive premiums resulting from professional negotiations,
✅Claims support until completion,
✅And fast digital services in your language.

Don’t let your energy or mining project stall due to failed claims. Contact L&G Insurance Broker now, before it’s too late.

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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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