INSURANCE COVER

Introduction
Although companies are constantly exposed to risk, usually the first time a company encounters insurance, like individual, is when it is a compulsory requirement of a law, a loan agreement or a work contract. This is because the government, bank and principals want to protect their own interest in the companys activities and assets and the company must pay their insurance.

 The work of any company (sole propreitor/small or large/multinational) is to organize economic resources (capital/assets/human resources) and run a business to make a profit for business owner. Insurance protect the companys profit. How? By protecting the companys asset from damage or loss and keeping the employees healthy and happy. Insurance compensate for financial losses to the company cause by accident or other mishaps affecting its assets and its employees or obligation created by public liability claim.

RISK
There are certain common risk which apply to all business activities such as those affecting personnel, motor vehicles, office equipment, real property and public liability In addition to the common risk, there are special risk, which are different for types of business activities. For example the special risk face by AEON hypermarket will be quite different from special risk face by banks although both the business will have certain risk in common.

Types of Insurances
The Workman Compensation (WC) Workmen's compensation is a compensation for injury to an employee or worker arising out of and in the course of employment that is paid to the worker or dependants. The employer will have to purchase a workmen's compensation insurance for workmen's compensation claims by injured employees or workers.

The Contractor All Risk (CAR) Contractors All Risk Insurance provides comprehensive coverage to all works to be executed in accordance with the contractors contract, temporary works, material, construction plant and equipment brought into the site, erection of plant and machinery, all the testing and commissioning works and liabilities arising out of the performance of the contract. The policy covers against accidental and unforeseen physical loss or damage to the property insured occurring during the period of insurance. The liability section of the policy provides indemnity in respect of third party liability which the insured shall become legally liable to pay as damages. The liability section of the policy provides indemnity in respect of third party liability which the insured shall become legally liable to pay as damages.

THE LAW GOVERNING THE WORKMEN'S COMPENSATION ACT (1952) IN MALAYSIA

This Act provides for the compensation payment to an injured employee or worker arising out of and in the course of employment or contracting occupational disease. Where the employee or worker dies in the event of fatal accident or contracting an occupational disease or in the course and arising out of performing his duty or work, the Workmen's Compensation Act 1952 provides for the compensation payment to the worker's dependants. This Act is administered by the Department of Labour and applies throughout Malaysia.

Foreign Worker Insured by Employer

Under the Foreign Worker's Scheme, an employer of foreign workers is responsible to pay an insurance premium of RM86 per year per worker An employer is not allowed to deduct the earnings of a worker for the payment of insurance premium. An employer found guilty of such action, shall be liable, on conviction to a fine of RM5,000 or to imprisonment for a 1 year term or to both.

CAR (Contd)
Under the material damage section of the policy, any sudden and unforeseen physical loss or damage caused by fire, lightning, explosion, flood, inundation, windstorm of any kind, earthquake, theft, burglary, bad workmanship, negligence, lack of skill, lack of experience, malicious acts or human error, or any other sudden and unforeseen event such as loss or damage due to collapse, foreign objects and on-site transport of items to be constructed are covered.

CAR (Contd)
The third party liability includes: Accidental bodily injury to or illness of third parties; or Accidental loss of or damage to property belonging to third parties