Workmen's Compensation and Employers Liability

In various types of liability insurance that exist in Indonesia, Employers Liability and Workmen Compensation Insurance are commonly marketed among general insurance companies. One of the supporting factors for these two insurance products to be marketed is one of them because it is required in work contracts, especially in the Oil and Gas Industry.

Although it has been known in Indonesia for a long time, often the application of these two types of insurance still creates confusion. Therefore we try to provide a brief review of how these two types of insurance operate.

Employers Liability

Employer Liability Insurance provides compensation to the insured for lawsuits / lawsuits filed by workers (who are registered and employed by the insured) because the worker suffers bodily injury due to negligence committed by the insured in carrying out the work where the insured is legally must pay for the loss.

Some important points here are that only people or parties who have work contracts are covered by this EL policy, namely parties who have an ’employer and employee’ relationship or ’employer and employee’ relationship. Injuries and illnesses that arise must be the result of work. Body injuries suffered by workers while off duty are not categorized as a result of work. Claims that arise must be explained in a causal manner related to the scope of work written in the schedule.

Parties who also have work contracts but act as independent contractors are not covered by EL insurance. The directors who work in a company that has an employment contract with the company where they work will also be treated as workers so that if the insured legal liability arises against the directors it will be covered by the EL policy.

The premium for Employers Liability Insurance is obtained by multiplying the rate against the annual wages. The highly variable rate is adjusted to the nature and risk of the work being carried out.

Workmen Compensation

Workmen Compensation Insurance (WCI) provides compensation/compensation to workers employed by the insured in order to carry out the work. Compensation to workers is also provided for diseases that may arise as a result of work. WCI also aims to get additional protection from mandatory government insurance (Jamsostek) so that workers get greater benefits. The benefits received are based on the employee’s salary. WCI is said to be a unique insurance product, has a rather high frequency of claims, moderate severity and its application varies from country to country.

The difference between Employer’s liability Insurance and Workmen’s Compensation Insurance is that in Employer’s Liability Insurance it must be proven that the employer (employee) has indeed made a mistake, while in Workmen’s Compensation Insurance, it is not necessary to prove an error by the employer (employee).

Insurance Object

Workmen’s Compensation Insurance

The object of coverage in this insurance is a lawsuit from the employee as a result of the insured’s business activities.

Employer’s Liability Insurance

The object of coverage in Employer’s liability insurance in this insurance is a lawsuit from the employee due to the insured’s negligence in carrying out his business activities


Workmen’s Compensation Insurance 

The risks that are covered in Workmen’s compensation Insurance are lawsuits from the employees, including the costs incurred for Défense (defense costs).

Employer’s Liability Insurance

The risks that are covered in Employer’s Liability Insurance are losses that arise as a result of lawsuits from third parties, including costs incurred to conduct a defense (defense costs).


Workmen’s Compensation Insurance 

  1. Matters related to intentional elements
  2. War, terrorism and riots
  3. Matters related to demands that are penalties and punishments
  4. Radioactive
  5. Asbestos

Employer’s Liability Insurance

  1. Matters related to intentional elements
  2. War, terrorism and riots
  3. Matters related to demands that are penalties and punishments
  4. Product liability including product recall
  5. Radioactive
  6. Asbestos
  7. Aircraft and watercraft liability
  8. Professional liability
  9. Property under supervision or ownership of the insured

Minimum Data Requirement

  1. List of Employees
  2. Company’s Detail Information
  3. Risk Location
  4. Employee’s Type of Work
  5. Number of Employee, Divided by The Number of Expatriate Employees and National Employees
  6. Total Salary in A Year. Divided by the Total Annual Salary on Expatriate Employees and National Employees
  7. Loss History

Claim Procedures

Report as soon as possible to the insurance company accompanied by taking the necessary rescue and security measures to avoid a bigger claim and complete the required documents:

  1. Claim Form
  2. Chronology of Events
  3. Police report in case of loss
  4. Original policy
  5. Other required documents