In Reply to: Licence posted by annie on Monday, 13. February 2012 at 13:33 Bali Time:
I don't have personal experience, because I have a valid motorbike license in Australia and carry an IDP, but when I lived in Indonesia, also admittedly 6 years ago, my friend had an accident in Bali. He was living there for a couple of months and got the local license in Denpasar, and his insurance did cover him for his medical costs. He broke his arm and was pretty mashed up.
The tourist license is a valid license issued in Indonesia, and not sure what you found out saying you wouldn't be covered. Personally I'd take them to court.