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The Liability Insurance Agreement serves as a critical risk management tool for businesses operating in Indonesia, providing protection against third-party claims and potential financial losses. This document is essential when entities seek to transfer their liability risks to an insurance provider, ensuring compliance with Indonesian insurance regulations while establishing clear procedures for claims handling and coverage determination. The agreement must adhere to Law No. 40 of 2014 on Insurance and relevant OJK regulations, incorporating mandatory provisions for insurance contracts in Indonesia. It is particularly valuable for businesses facing potential third-party claims, professional liability risks, or general operational liability concerns, offering a structured framework for risk transfer and claims management while ensuring regulatory compliance in the Indonesian insurance market.

1. Parties: Identification of the insurer and the insured, including complete legal names, registration numbers, and addresses

2. Background: Context of the insurance arrangement, nature of the liability coverage sought, and general purpose of the agreement

3. Definitions: Detailed definitions of key terms used throughout the agreement, including insurance-specific terminology

4. Scope of Coverage: Detailed description of the liability risks covered, including territorial limits and applicable conditions

5. Exclusions: Specific circumstances, activities, or losses that are not covered under the policy

6. Premium and Payment Terms: Premium amount, payment schedule, and consequences of non-payment

7. Duration and Renewal: Policy period, renewal conditions, and termination provisions

8. Claims Procedure: Step-by-step process for filing claims, required documentation, and timelines

9. Obligations of the Insured: Duties of the insured including disclosure requirements, risk mitigation, and claim notification

10. Rights and Obligations of the Insurer: Insurer's responsibilities, rights to investigate claims, and payment obligations

11. Dispute Resolution: Procedures for handling disputes, including mediation, arbitration, or court proceedings as per Indonesian law

12. Governing Law: Confirmation of Indonesian law as governing law and relevant jurisdictional matters

13. General Provisions: Standard contractual clauses including force majeure, notices, and amendments