Good news comes from the Indonesian heavy equipment sector. According to a report by the Indonesian Heavy Equipment Industry Association (HINABI), national heavy equipment sales increased by 33.65% year-on-year (YoY) in the first half of 2025, reaching 4,460 units, a significant increase from 3,337 units in the same period last year. This figure is a strong signal that various construction and infrastructure projects are on the rise. However, most importantly, there has been a shift in demand from mining to the agriculture and forestry sectors, which are now the mainstays.
However, behind this positive growth lies a significant challenge that requires vigilance: the ever-increasing risk of heavy equipment damage and claims. For contractors, mining companies, and heavy equipment rental providers, increased demand also means increased operational risks, financing risks, and even heavy equipment damage claims. This is the time for companies to strengthen their asset protection strategies with the support of a trusted heavy equipment insurance broker. Amidst the surge in project activity, a small error in risk management can result in significant losses.
Therefore, it’s important to be proactive and ensure your assets are fully protected. Before risk strikes, contact L&G Insurance Broker now at 08118507773 for a free consultation.
National Heavy Equipment Sales Rise 33%
The 33.65% increase in heavy equipment sales in the first half of 2025 is a key indicator of the recovery of Indonesia’s large industrial sector. According to Hinabi data, production reached 4,460 units, dominated by hydraulic excavators (3,709 units), bulldozers (3,885 units), and dump trucks (358 units). According to Hinabi Chairman Widayat Raharjo, this increase is the result of high demand last year, which continued into the second quarter of 2025. Source: ekonomi.bisnis.com.
Shifting Demand Trends: Agriculture and Forestry Dominate
The most striking shift in demand trends is the decline in the mining sector’s dominance. Now, the heavy equipment market share is dominated by:
- Agriculture: 40%
- Forestry: 45%
- Construction: 10%
- Mining: 5%
The latest data from Hinabi, quoted by ekonomi.bisnis.com, confirms that mining is no longer the primary driver of national heavy equipment sales. The decline in demand from the mining sector is driven by weakening coal prices, leading to projected lower future demand for this sector. This indicates that projects are now driven more by food security and forest management needs, which carry different operational risk characteristics.
Operational Consequences and Risks
Increased activity in the agriculture and forestry sectors brings new challenges, such as the risk of land fires, operations in wet terrain, and theft in remote project areas. This is why protection through heavy equipment insurance has become an urgent necessity, not an option, to offset the high national heavy equipment sales currently driven by market diversification.
Increased Frequency of Heavy Equipment Damage Claims
The increasing number of heavy equipment in operation automatically increases the potential for risk. In the context of agricultural and forestry projects, which are now dominant markets, risks arise not only from physical damage but also from operator error, natural disasters, or system failures. Operating heavy equipment in peatlands or plantation areas, for example, increases the operational risk of equipment sinking or becoming submerged.
Some common risks often faced by heavy equipment owners in Indonesia include:
- Fires due to overload or short circuits, especially in vulnerable forestry areas.
- Machine failure due to human error or unscheduled maintenance, which triggers serious heavy equipment damage claims.
- Damage due to disasters such as floods or muddy ground can cause equipment to become stuck and require high evacuation costs.
- Losses due to theft of units or components at remote project locations with minimal supervision.
In many cases, heavy equipment damage claims can reach hundreds of millions of rupiah or even more. Without adequate protection, these losses can disrupt project cash flow and delay completion. This is where the role of a heavy equipment insurance broker becomes crucial, not only preparing the policy but also ensuring that every risk is identified and properly managed from the outset.
Why Insurance Brokers Are Needed in the Heavy Equipment Industry
Many business owners still believe they can manage insurance policies themselves. However, the heavy equipment industry is highly complex, requiring a thorough understanding of technical and financial risks, particularly in the face of shifting demand trends toward agriculture and forestry.
Heavy equipment insurance brokers like L&G Insurance Broker act as independent consultants who help you:
- Comprehensive Risk Assessment: Analyze risks by location (agriculture, forestry, construction) and determine the most appropriate type of protection.
- Compare the Best Offers: Compare various offers from the best insurance companies in Indonesia, ensuring competitive premiums but with maximum coverage, including special clauses for landslide or flood risks relevant to the agricultural sector.
- Assisting with the Claims Process to Completion: Brokers ensure that heavy equipment damage claims are processed quickly and fairly, so that clients are not disadvantaged.
- Providing Risk Management Recommendations: Providing additional recommendations regarding risk management and loss prevention.
With this expertise, heavy equipment owners not only receive protection, but also professional support when risks actually occur.
To ensure your heavy equipment is optimally protected and your claim goes smoothly, contact L&G Insurance Broker immediately at 08118507773 for a free consultation before the risk approaches.
Case Studies and National Economic Impact
Case Study: Project Losses and Broker Solutions
One real-life example is the case of an excavator that caught fire in a coal mine in Kalimantan. The equipment, valued at Rp 3 billion, was completely destroyed by overheating. Fortunately, thanks to a broker-designed heavy equipment insurance policy, the claim was resolved quickly in less than 45 business days. This case demonstrates the crucial role of insurance brokers as bridges between equipment owners and insurance companies, particularly in ensuring that every detail of a heavy equipment damage claim is received and processed according to the policy.
Economic Impact: Asset Protection Supports Project Sustainability
The rise in heavy equipment sales is not only about increased business volume, but also reflects growing confidence among industry players in national development. However, project sustainability will be hampered without a robust risk management system. With heavy equipment insurance, companies can:
- Maintain financial stability even in the event of equipment failure.
- Avoid operational disruptions due to long or unpaid claims.
- Reduce the replacement cost of long-term assets.
- Demonstrate credibility and compliance with major project standards.
It’s important to remember that heavy equipment investment can account for 20–30% of the total project cost. This means that the loss of even one unit can significantly impact a company’s profit margin.
Types of Insurance Protection for Heavy Equipment
For those of you who operate heavy equipment such as excavators, bulldozers, wheel loaders, cranes, or dump trucks, here are several types of insurance coverage that you should consider, all of which can be facilitated by a heavy equipment insurance broker:
- Material Damage Insurance (Physical Damage): Protects heavy equipment from the risk of fire, collision, overturning, or natural disasters.
- Third Party Liability (TPL) Insurance: Covers legal liability for third party losses resulting from heavy equipment operations (e.g., work accidents).
- Theft & Burglary Insurance: Covers losses due to theft of important units or components at project sites, which are increasingly vulnerable in agricultural and forestry areas.
- Marine Cargo Insurance (Transit): Specifically for heavy equipment sent between project locations via land or sea, protects against risks during transportation.
- Business Interruption (BI) Insurance: Protects against loss of income (Loss of Hire) due to operational disruptions after heavy equipment is severely damaged or lost.
By choosing a professional heavy equipment insurance broker, you can obtain the most efficient combination of protection according to the type of project and work location, ensuring that heavy equipment damage claims are always covered.
Increased Operational Risks in New Sectors
The coming years are projected to be a period of significant expansion for Indonesia’s agriculture and forestry sectors, which are currently the primary drivers of national heavy equipment sales. However, increasing project scale also means increased exposure to operational risks and claims costs in a different environment than mining. Risks such as unstable soils, wildfires, and extreme weather conditions require brokers to have a deep understanding.
The Key Role of L&G Insurance Broker
Therefore, collaborating with an experienced insurance broker in the heavy equipment sector is a strategic move. Brokers not only help select policies but also monitor project risks and update protection according to evolving business needs. L&G Insurance Broker, specializing in heavy equipment insurance, ensures each client receives:
- Fast Policy Issuance: Supports project speed in the field.
- In-depth Risk Analysis: Identifying potential heavy equipment damage claims in the agriculture and forestry sectors.
- Professional Claims Assistance: Ensures claims are approved fairly and quickly, keeping cash flow stable.
Conclusion
The 33.65% increase in national heavy equipment sales signals high industry optimism, driven by the now-market-leading agriculture and forestry sectors. However, on-the-ground risks are also rising sharply, exacerbated by declining demand in the coal mining sector. Without a robust protection strategy, anticipated profits can quickly turn into significant losses due to unexpected heavy equipment damage claims. Comprehensive heavy equipment insurance, supported by professional risk management, is the only way for contractors and agricultural companies to ensure project sustainability and financial stability.
Therefore, contractors, agricultural companies, and heavy equipment rental providers must begin reviewing their insurance policies. Heavy equipment insurance brokers like L&G Insurance Broker play a vital role in helping design optimal asset protection. L&G ensures that each piece of heavy equipment has coverage commensurate with its value and risk profile, eliminating the uncertainty and risk of claim rejections that often arise when handling insurance on their own, especially when dealing with complex heavy equipment damage claims in new sectors.
Don’t wait until a major loss occurs to take action. It’s time to secure your billions of rupiah in investments with the best protection.
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