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.
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 n