A major fire has engulfed a party decoration warehouse in East Jakarta, destroying 700 square meters and causing losses of up to Rp 1.7 billion. Preliminary investigations suggest an electrical short circuit was the primary cause. Fortunately, there were no fatalities, but the incident serves as a stark reminder for businesses in the decoration, logistics, and warehousing sectors about the importance of property and fire insurance. Disasters are unpredictable, but losses can be controlled—as long as your business has the right protection.
This article will thoroughly discuss the chronology of the fire, risk management analysis, and the financial impact on a decoration business without adequate property insurance. We will outline protection solutions and fire insurance recommendations that every warehouse owner in Indonesia should have. Therefore, before the risk arises, protect your business assets immediately. Contact L&G Insurance Broker now on 08118507773 for a free consultation and recommendations for the best protection for your business.
A Brief Chronology: A Fire from an Electrical Outlet That Ended in Disaster
The fire occurred on Tuesday, October 28, 2025, at approximately 2:30 PM WIB in the Kebon Pala area of Makassar, East Jakarta. The fire originated from an electrical short in an electrical outlet, then quickly spread to sacks containing flammable party decorations, such as cloth, Styrofoam, and light wood. (Source: Local Media Report, October 2025).
According to the local neighborhood association (RT) head, Anas, the fire grew in a matter of minutes. Residents tried to extinguish the flames with whatever tools they had while waiting for firefighters to arrive. About 15 minutes later, 13 fire trucks and 65 personnel were deployed to the scene. After nearly three hours of fighting, the fire was finally extinguished at 5:00 p.m. WIB. However, most of the warehouse’s contents were destroyed, including decoration equipment, wood materials, and metal fittings for the tent. A nearby house also caught fire, increasing the risk of third-party liability.
Total losses are estimated at Rp 1.7 billion, including the building, equipment, and party decorations. This case demonstrates that fire is a major threat to the warehousing business in Indonesia.
Risk Analysis: Why Are Decoration Warehouses Prone to Fire?
The warehouse fire in East Jakarta reflects the high fire risk in the decoration and event organizer (EO) industry. Several key factors make this sector particularly vulnerable:
- Flammable Materials: Items such as synthetic fabrics, plastic, styrofoam, and wood are the main materials for party decorations that have a very fast ignition rate (low flash point).
- Electrical Overload: Many decorating warehouses install additional electrical outlets, extension cords, and heating appliances without proper technical supervision (a major potential for short circuits).
- Non-Standard Electrical Systems: Electrical installations that do not comply with SNI and are not carried out by licensed technicians are often the trigger for latent fires.
- Lack of Fire Extinguishers: Many warehouses do not have APAR (Light Fire Extinguishers) or automatic sprinkler systems, making it difficult to control the fire at the beginning of the incident (increasing the impact of losses).
- Dense Storage: Items are stacked tightly together for space efficiency, which actually accelerates the spread of fire.
The combination of these factors makes fire insurance and commercial property insurance an absolute necessity. Without financial protection supported by an expert insurance broker, losses can quickly erode business capital and even shut down operations entirely.
Financial and Operational Impact Estimation
The fire, which caused Rp1.7 billion in losses, wasn’t just about the loss of physical assets. Its impact extended to various aspects of the business, and the uninsured warehouse owner had to bear the full cost:
- Fixed Asset Loss: Buildings and production equipment (sewing machines, cutting tools) were totally lost.
- Merchandise Loss (Stock): Decoration materials and customer order stock were burned (Inventory Loss).
- Operational Interruption (Business Interruption): Cancelled client orders, reduced business reputation, and lost revenue during the recovery process.
- Additional Costs: Renting a new location, procuring new items at rush prices, and fines due to delays in event projects.
- Third Party Liability: Damage to a neighboring resident’s house (this case) can trigger a lawsuit (Public Liability).
If a warehouse owner doesn’t have property or fire insurance, they must cover all these costs themselves. In many cases, this leaves the business unable to recover from financial losses of up to Rp1.7 billion, forcing it to close.
The Importance of Warehouse Insurance and Commercial Property Insurance
Many business owners still think insurance is only important for large factories. However, even small warehouses for party decorations, printing presses, and logistics storage facilities require commercial property insurance (Fire Insurance or Property All Risks/PAR).
This product includes protection against:
- Fires due to electrical short circuits, explosions, or human negligence (the main risks in warehouses).
- Damage caused by smoke, lightning, or falling objects from the air.
- Cost of Clearing Debris and Site Restoration.
- Continued coverage for loss of income due to operational disruption (Business Interruption/BI), which is the largest indirect loss.
With fire insurance arranged by a professional insurance broker like L&G Insurance Broker, coverage can be tailored to your business’s risk profile and asset value. The broker will ensure your policy actually pays claims in the event of a disaster—not just a promise on paper.
Risk Management Review: Prevention Before Fire Starts
This incident in East Jakarta serves as a reminder of the importance of fire risk management in small businesses and industries. Some simple steps that can be taken as part of proactive risk management include:
- Audit the electrical system at least once every 6 months by a licensed technician.
- Use SNI standard electrical cables and terminals and avoid using stacked power outlets.
- Provide a light fire extinguisher (APAR) at every vulnerable point and train employees how to use it.
- Conduct evacuation and emergency response training for employees regularly.
- Store important documents and business archives in a fireproof place (off-site storage or cloud backup).
However, it’s important to remember: prevention is no substitute for financial protection. No matter how small your precautionary measures, there are still factors beyond human control—such as hidden short circuits, power surges, or even employee negligence. That’s why fire insurance is your business’s last line of defense.
The Strategic Role of Insurance Brokers in Protecting Business Assets
Managing business insurance is no easy task. Many business owners purchase policies directly from insurance companies without understanding the terms and conditions and are then disappointed when claims are rejected due to “risk exclusions.”
This is the crucial role of a professional insurance broker like L&G Insurance Broker. As an OJK-registered insurance broker based in South Tangerang, L&G’s duties include:
- Analyze your business risk profile (Risk Assessment of warehouse materials and electricity).
- Find the best property and fire insurance products from various well-known insurance companies (compare prices and wording).
- Accompanying you during the claim process until payment is complete (ensuring that the loss of IDR 1.7 billion is fully reimbursed).
- Provide regular fire risk mitigation education and training.
- Establish Loss of Profits Coverage (Business Interruption Extension) to cover lost income during business interruption.
With the support of an experienced broker, you not only purchase a policy, but also receive comprehensive risk management services — from risk identification and risk transfer to post-incident recovery.
👉 Therefore, before the risk of swallowing up your assets like the warehouse fire in East Jakarta, immediately consult your business with an expert. Contact L&G Insurance Broker now in 08118507773 for a free consultation and recommendations for the best protection for your business.
Case Study: A Business That Resurrected Thanks to Insurance Protection
Several years ago, a large decoration company in Surabaya experienced a similar fire (suspected to be caused by an electrical short circuit). However, thanks to a commercial property insurance policy arranged by an insurance broker, they successfully settled a claim of up to IDR 4 billion. The proceeds were used to build a new warehouse, purchase new equipment, and restore operations in just three months.
This comparison shows: Companies with insurance can bounce back, maintaining cash flow and client confidence, while those without are forced to close due to total financial loss. The broker’s role is to ensure the claims process is expedited, turning catastrophic losses into opportunities for rapid business recovery.
Risk Recommendations and Insurance Solutions for Fire-Prone Industries
This fire at a party decoration warehouse highlights a protection gap that must be addressed immediately. Here are recommended risks and insurance solutions that decoration, warehousing, and manufacturing businesses that use flammable materials should implement:
- Have a Commercial Property Policy (Property All Risks/PAR): Covers buildings and their contents against fire, explosions, and natural disasters.
- Add Business Interruption (BI) Expansion: Covers lost profits due to downtime after a fire.
- Include a Public Liability Clause: Protects against third-party lawsuits (for example, a resident’s house that caught fire).
- Conduct a Risk Survey by the Broker: The broker will ask the insurance company to conduct a survey to assess the electrical installation and fire prevention procedures (risk management) before the policy is issued.
- Ensure Adequate Asset Valuation: Avoid underinsurance (policy should reflect new replacement price of asset).
Conclusion
The fire at a party decoration warehouse in East Jakarta, which caused losses of up to Rp 1.7 billion, provides an important lesson for all businesses. This incident demonstrates that the risk of fires triggered by electrical short circuits is a potentially devastating threat to warehousing businesses that use flammable materials. The financial impact of such a disaster goes far beyond the immediate loss of assets; it causes complete operational disruption, loss of customer trust, and significant recovery costs. Without solid commercial property insurance coverage, businesses would be crippled, struggling to recover from such significant financial losses.
Effective fire risk management depends not only on fire extinguishers or sprinkler systems, but also on financial risk transfer through appropriate fire insurance. Professional insurance brokers like L&G Insurance Broker play a central role in this process. They ensure your policy covers relevant risks (such as Business Interruption and Public Liability) and that the coverage value aligns with the market replacement price of assets. L&G Insurance Broker, located in South Tangerang and registered with the Financial Services Authority (OJK), is a strategic partner that bridges clients’ protection needs with top insurance companies, ensuring your business is guaranteed security and easy claims processing in times of emergency.
L&G Insurance Broker has experience helping numerous companies in Indonesia recover from major losses such as fires and natural disasters. Our team of experts is ready to help you develop optimal business protection against the risks of fire, theft, and losses due to operational disruptions. Don’t let your assets become easy targets for the next financial loss. Make commercial property insurance a priority investment today.
Source:
- https://www.suara.com/news/2025/10/28/175340/telan-kerugian-rp17-miliar-kebakaran-gudang-dekorasi-pesta-di-jaktim-karena-apa
- https://news.detik.com/berita/d-8182863/detik-detik-kebakaran-hanguskan-gudang-dekorasi-pesta-di-jaktim
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