Trade and Distribution Business Owners, Beware! Losses Can Cost Billions If You Don’t Use an OJK-Registered Insurance Broker

A Fast-Growing Business, But Risks Lurk Around Every Warehouse and Highway

In the last five years, Indonesia has become a haven for many Chinese entrepreneurs in the trade and distribution sectors.
From importers of electronics, household appliances, building materials, to industrial spare parts, thousands of containers flow from the ports of Tanjung Priok, Surabaya, and Belawan every month to all corners of the country.

One of them is Mr. Liu, the owner of PT Dragon Distribution Indonesia, a household appliances importer and distributor company from Guangzhou.
His business is growing rapidly — he has warehouses in Cikarang, Semarang, and Makassar, with stock valued at more than Rp 120 billion.

However, behind the success, Mr. Liu did not realize that one small mistake in insurance could destroy his business overnight.

The Night the Warehouse Burned Down

One night in February, security guards at a Semarang warehouse saw smoke coming from the electronics storage area.
In a matter of minutes, the fire spread rapidly.
Although firefighters arrived shortly after, most of the stock worth more than Rp 15 billion was burned down.

Mr. Liu immediately contacted the insurance company and filed a claim.
But after a few weeks, he received shocking news:

“The claim cannot be paid in full because the storage of the goods did not meet the safety standards required in the policy.”

Apparently, the insurance agent who arranged the policy never didfield survey.
The policy only covers “stored items with an active sprinkler system and automatic fire detection system.”
In fact, Mr. Liu’s warehouse only usesfire extinguisher manualand does not yet have an automatic detection system.

The claim was ultimately paid for only about 30% of the total loss.
The remaining losses of more than IDR 10 billion must be borne by the company itself.
His business was almost paralyzed.

Mistakes that Occur in Many Chinese Companies

Mr. Liu’s case is not an isolated one.
Many Chinese entrepreneurs in the trade and logistics sectors have experienced similar problems — because they entrusted their insurance matters to unofficial agents or internal parties without expertise.

Some common mistakes that often occur:

• The policy does not cover the risk of fire due to electrical short circuit or overload.
• Goods in transit are not insured.
• Important clauses such as “Stock Declaration Clause” or “Automatic Reinstatement Clause” are not included.
• The insured value does not match the actual value (underinsured).

In the world of trade and distribution, the turnover of goods is very fast.
Prices, stock, and storage conditions may change weekly.
Without a professional broker performing regular analysis and reviews, insurance policies can becomedead document— looks safe, but doesn’t really protect.

Risks Lurking in Every Distribution Chain

The distribution business has a long chain of risks: from ports, warehouses, vehicles, to stores or end customers.

Here are some risks that are often overlooked:

• Fire and explosion in warehouse or re-packing factory.
• Damage or loss of goods during land and sea shipping.
• Theft while goods are being temporarily stored at a depot or port.
• Traffic accidents that cause total damage to goods.
• Damage due to extreme weather (floods, lightning, storms).

For Chinese entrepreneurs accustomed to their country’s sophisticated logistics system, Indonesia’s infrastructure and risks are often beyond expectations.
Uneven roads, crowded warehouses, and lengthy customs clearance processes can increase the potential for losses.

Without comprehensive protection from a licensed insurance broker, all of this could become a financial time bomb.

A Different Story When an Official Broker is Involved

In contrast to Mr. Liu’s story, let’s look at the story of PT Harmony Logistic Solution, a Chinese logistics company that manages the distribution of heavy industrial equipment from Shanghai to Eastern Indonesia.
Before starting operations, they appointed L&G Insurance Broker as their official partner to handle all insurance matters.

L&G’s first step is to conduct a comprehensive risk assessment, including:

• Warehouse building structure,
• Sea and land distribution routes,
• Vehicle condition,
• As well as security procedures for valuables.

As a result, L&G recommends a combination of policies:

• Property All Risks (PAR) for warehouse protection,
• Marine Cargo Insurance for goods in transit,
• Business Interruption Insurance to compensate for losses due to operational disruptions,
• As well as Liability Insurance for protection against third party claims.

Several months later, a truck carrying industrial equipment worth Rp 7 billion skidded off a mountainous road in Sulawesi.
The item was badly damaged — but within 45 days, the claim was paid in full by insurance.
Why can it be fast?
Because all documents and claim clauses have been prepared from the start by L&G.

The company continues to operate normally, without major disruption to cash flow.

The Difference Between OJK-Authorized Agents and Brokers

Many foreign entrepreneurs in Indonesia do not realize thatInsurance agents and insurance brokers have different functions.

By selectingofficial broker, entrepreneurs get a stronger bargaining position, broader protection, and clear legal guarantees.

Business Language and Culture Challenges

One of the common obstacles for Chinese entrepreneurs in Indonesia is communication and differences in business culture.
Many people think that insurance matters are as simple as “signing and paying the premium”.
In fact, the contents of the policy are a complex legal document and need to be understood in detail.

Authorized brokers such as L&G Insurance Broker have advantages in this regard:

• Providing bilingual services (Indonesian & English),
• Can provide summary in Chinese if needed,
• Explaining policy clauses in an easy to understand form,
• And ensure each article truly reflects the client’s business needs.

In this way, entrepreneurs will not experience misinterpretations that have fatal consequences when making claims.

The Digital Era — Everything Can Be Monitored in Real-Time

L&G has also integrated a digital risk management system.
Entrepreneurs can:

• Access policy documents through the online portal,
• View 24 hour claim status,
• Receive automatic notifications about due dates,
• And get periodic risk analysis reports.

For Chinese entrepreneurs accustomed to fast and transparent systems, this digital solution makes the entire process feel convenient and efficient.

L&G Insurance Broker — A Trusted Partner for Distribution Business

L&G has extensive experience in handling insurance for:

• Distributor of electronics and household appliances,
• National and international logistics companies,
• Warehouse for storing chemicals, building materials, and automotive spare parts,
• Up to large e-commerce companies that have delivery networks throughout Indonesia.

As an official broker registered with the OJK, L&G ensures that all policies comply with Indonesian legal standards and the real business needs of clients.

Conclusion: Don’t Wait for a Warehouse to Burn Before Taking Action

Mr. Liu’s story is an expensive lesson for many Chinese entrepreneurs.
Insurance is not just a formality — it is a business protection instrument that can determine the life or death of a company.

One small mistake in selecting a policy or clause could cost your business billions of rupiah.
However, with an authorized insurance broker like L&G Insurance Broker, all risks can be managed safely and professionally.

✅Complete risk analysis
✅Custom policy design
✅Best premium negotiation
✅Claims support until completion
✅Fast and transparent digital-based service

Protect your trading and distribution business before it’s too late. Contact L&G Insurance Broker now—an OJK-approved partner who understands how to protect your investments in Indonesia.

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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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