This is governed under the Motor Vehicles (Third-Party Risks and Compensation) Act where the law requires motorists to have in place an insurance policy or financial security for bodily injury to a third party. The spirit of the law is to provide relief to the victims of accident due to ownership, use or maintenance of motor vehicles.
Also, if you are driving for commercial purposes including Grab, Ryde and Gojek, you will need commercial car insurance as private car insurance does not cover when your car is driven for commercial use.