In order to increase it\’s national revenues, the Indonesian government will officially impose the obligation to use it\’s national insurance companies for all coal exports from Indonesia. This regulation will be implemented on February 1, 2019.
This obligation is regulated in the Minister of Trade Regulation Number 82 of 2017 concerning Provisions on the Use of the Navy and National Insurance for Exports and Imports of Certain Goods, which have been amended by Minister of Trade regulation Number 80 of 2018.
Exporters usually use the free on board (FOB) trading term. Overseas buyers who buy insurance from their home countries. With this new regulation, the trading term will be changed to be Cost Insurance and Freight (CIF). Insurance to be bought in Indonesia from local insurance companies.
The critical risks of transporting coal is \”self combustion and inherent vice\” or burning itself. In the standard marine cargo insurance policies, this risks are not covered. It can only be covered by the addition of a special clause, known as the Coal Clause Institute.
For the sake of high standard security, we suggest that buyers or exporters should use insurance brokerage services. There are more than 60 insurance companies in Indonesia that have the capacity to cover coal insurance but they are different in capabilities and capacities. It will be difficult to choose the best one. Insurance broker who would do it for you. In addition, insurance brokers will also help you with the settlement of claim when it happens.
L&G Insurance Brokers is one of the leading insurance brokerage companies in Indonesia. L&G focuses on the Mining and Energy sectors and has extensive experience in managing coal transportation insurance. L&G is ready to support coal buyers from all over the world as well as local exporters to provide a quality marine cargo (coal) with the best terms and conditions, competitive premium rates and supported by the best insurance companies.
International coal buyers could rely on the capabilities of Indonesian insurance companies. Besides being experienced and having the capacity, they are also supported by reinsurance backups from international reinsurance companies from various regions in Europe, Asia and Europe.
In case of a claim, L&G is ready to serve it’s clients by utilizing it’s international network that has representatives in the export destination countries. The claims team will conduct a survey and carry out loss adjustments in accordance with international standards.
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