Business insurance types fall into two groups for a Singapore small firm: one that the law requires and one that is your choice. Work injury insurance sits in the first group. Property, liability and the rest sit in the second. This checklist shows what each cover does and what to ask before you sign.
Start with the cover the law requires
If you employ people, work injury compensation insurance is not optional. The Ministry of Manpower (MOM) says you must insure every employee who does manual work, whatever the pay. You must also insure non-manual employees who earn $2,600 or less a month. That limit has applied since 1 April 2021. Overtime, bonuses and allowances do not count toward it.
The rule covers local and foreign staff alike. Staff above the limit do not need a policy, but you still owe them compensation for a valid claim. Not having adequate cover is an offence. The penalty is a fine of up to $10,000, up to 12 months in jail, or both.
Since 1 January 2021, policies must come from an insurer designated by MOM. They follow standard terms set under the Work Injury Compensation Act 2019, and work-related exclusion clauses are not allowed, except for asbestos cases.
Property and business interruption cover
Property cover pays when your premises, stock, tools or equipment are damaged or lost. Fire is the classic case. A broader "all risks" policy covers more events than a basic fire policy. Insurers in Singapore sell both, often bundled in one small business package.
Business interruption cover is a separate piece. It replaces income you lose while a covered event keeps you closed. A shop with a fire still has rent and wages to pay. Ask whether your policy pays for lost income, and for how many months.
- Is the sum insured close to what it would cost to replace everything today?
- Which events are covered, and which are listed as exclusions?
- How much do you pay first on each claim (the excess)?
- Does stock kept in a rented store or a delivery van count?
Liability cover
Liability cover pays when someone says your business hurt them or damaged their property. A customer slips in your shop. A contractor breaks a client's equipment. Without cover, you pay legal costs and any award from your own funds.
Service firms often add professional indemnity. It deals with claims that your advice or work was wrong or caused a client a loss. Consultants, designers and accountants look at it first. A café or a retailer may care more about general liability, which deals with injury and damage on or near the premises.
Ask the insurer what limit applies to each claim and to the whole year. Ask whether legal costs sit inside the limit or on top of it.
Other covers to weigh
Insurers also list cyber cover, which responds to cyber-related risks, and accident and health plans for staff. These are choices, not rules. Whether you need them depends on how your firm works.
- Cyber: do you store customer data or take payments online?
- Staff health: do you want to offer more than the law asks?
- Marine or cargo: do you ship goods you own?
A package policy bundles several covers under one contract. It can lower paperwork and cost. Check that the bundle does not leave a gap in a cover you really need.
Questions to ask before you buy
Check the seller first. Agents and brokers of general insurance must be registered with the Agents Registration Board under the General Insurance Association of Singapore. Ask the agent for a registration number, then search for it on the Board's list.
Insurers and agents must explain the main features of a product and handle claims fairly and promptly under the industry Code of Practice. Use that. Ask for the policy wording in writing, and read the exclusions page before the price page.
- Which of these covers does the law require for my staff?
- What is the sum insured, and how is it set?
- What are the exclusions and the excess?
- How do I make a claim, and how long does it usually take?
- What happens to my cover if I move premises or add staff?
If a general insurer fails, the Singapore Deposit Insurance Corporation pays eligible claims for certain policy types, work injury among them. That is a backstop, not a reason to skip the checks above.
A short checklist to keep
- Insure all manual workers and all non-manual staff earning $2,600 or less a month.
- Buy property cover that matches the real replacement cost.
- Add business interruption cover if a closure would stop your income.
- Choose liability cover that fits your trade.
- Review each policy once a year, and again when the business changes.
This is general information only. For your own cover, check the rules with MOM and your insurer.