Workers Compensation Insurance

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Workers Compensation Insurance

What is the Workers Compensation Insurance in Malaysia?

It is a workers compensation coverage. This workers compensation insurance is bought as an employer business protection.  To protect an employer’s liability for an injured worker or worker suffering from occupational diseases from the workplace.  It is also known as workmen compensation insurance or worker compensation law coverage insurance.

A workers comp protection is to cover workers from work-related injuries. The workers are as defined by several acts of the Malaysian Parliament and  Malaysian Common Law.

In Malaysia, the Workmen’s Compensation Act 1952 and Common Law states the liabilities an employer has for their employees.  Today, this covers mostly foreign workers.  Most insurance companies provide compensation plans to cover for this. Malaysian citizens and permanent residents currently paying for SOCSO are covered for work-related injuries.The government is in the process of obsoleting the Workmen’s Compensation Act. They plan to have all worker compensation coverage to be within SOCSO. However, Common Law will still have implication and impact.

You need to know the definition of worker in Malaysian law.  There are many laws on this. The best references are the Workmen’s Compensation Act and the Employees’ Social Security Act.  Then you will be able to purchase workers compensation insurance clearly.

Why do we need Workmen Compensation Insurance?

We want the employer protected from workmen liability.  That is implied by Malaysian Common Law, and when required to by a foreign law applied in a contract.

This insurance covers workplace injuries.  It is an employer liability insurance. It protects the company for legal and medical costs, for employees injured in the course of employment.

During work, at the workplace when carrying out work that resulted in the injury of the worker.  This workers compensation plan covers personal injury and provides compensation such as wage replacement and medical benefits.

A company buys this protection to comply with the laws that the company has to comply.  For example. A company in Malaysia that signs a contract. The contract is governed by the national law as agreed in the contract.  It could be Malaysian. It could be foreign.

If foreign, then the company has to comply with the laws of the foreign country.  Then the Malaysian company may need to provide this coverage to comply with that country’s law.

The contracting party may require indemnity or liability compliance that the company has to follow.  Then this insurance may also be required.

This insurance protects the employer from a suit of negligence from an injured employee.  There are many types of insurance policies. They cover benefits, protection, and compensation.  This insurance policy is a liability protection insurance for companies.

This insurance varies from country to country or even vary from state to state.  In Malaysia, Federal laws cover all states and territories in Malaysia.

What is the coverage provided by the Workmen Compensation Insurance?

This Workmen Compensation Insurance covers legal and medical costs and worker’s income liabilities for an employer.  Protection against an occupational mishap at the workplace by a worker.

It covers an employer’s legal obligations to the safety and well being of workers in a workplace.

The coverage can be listed as follows:

  1. Medical costs and Income compensation for workers personal injuries from the workplace

  2. Death or injury benefits.

  3. Legal costs coverage for the employer in the event of a lawsuit for such injuries or negligence.

  4. Coverage is within Malaysia, as required and defined by the laws of Malaysia

The workmen can be employees, sub contractors employees or any worker the employer has contractually obliged to pay or cover.  This definition is very important to protect an employer from liabilities or lawsuits from workplace incidents.

The Common Law plays an important aspect and can potentially stand alone from other Workers Acts in this instance.  You should note that the Workmen Compensation Acts and SOCSO Acts are quite limited in scope based on salary prerequisites.

Workmen can claim compensation based on Common Law.  They can make a claim of negligence or seeking compensation and relief from the Employer.  Common Law liability coverage is an additional cover to this Workmen Compensation Insurance.

Negligence can be claimed by proving a failure of the employer.  A failure such as to provide a safe working environment. Safe equipment in good working order. A failure to recruit suitably qualified staff competent for the required job scope.

The coverage is for a year.  With an option for annual renewal.   The amount of coverage is based on the employer’s annual payroll and coverage requirements.  Acts of war are excluded from coverage.

Contact our AIA Life Planning Advisor to get in touch with us and start your personal coverage or choose your plan now. Get covered correctly. Be advised correctly. Call today to be advised on the best insurance protection personalized for you. Or send us the form below on your interest.

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