These 3 Insurance Types are Must-Haves for Singapore Businesses

Many people assume that purchasing business insurance is a legal obligation. However, business insurance is not there to only protect you and your company, it also protects your customers, workers and even suppliers!

What would you do if a fire, unfortunately, breaks out at your retail store, and you have no insurance to cover for this incident? Or, what if a delivery worker gets into an accident during working hours?

Such incidents have happened before, and have resulted in a lot of trouble for both employers and employees who were not covered under business insurance. By getting business insurance, you can rest easy knowing that you are protected. You will be able to set your mind to improving your business's profitability, rather than constantly thinking about potential accidents that could occur.

This article will give you greater insights into the best insurance types for business owners who just started their business, or have been looking out for what plans to purchase.

The three most important business insurance type

There are 3 general types of business insurance that the majority of businesses out there would be best suited for:

1. Legal Liability

2. Employees

3. Property

1. Legal Liability

Your business will always be at risk of being held liable for compensation as a result of your employees' negligence during work.

• Professional indemnity insurance covers expenses including accountants, auditors and lawyers should you be held legally liable for negligence. This insurance type, however, should be purchased based on your professional occupation

• Public liability insurance can protect you when bodily injury or damage to property happens either due to your business operations, or the manufacture and distribution of your product

• Director and officer insurance can offer indemnity to the key decision-makers in the business, should they be held liable for negligence or breach of duty

2. Employees

It is sometimes a legal requirement to insure your employees, but this depends on their employment status. Generally though, these are the 2 key insurance types that you can consider for your workers: basic health insurance and work injury compensation insurance.

1. Basic health insurance

Singapore employees

Employers are legally required to make CPF contributions, and some of these contributions will be put under MediShield Life. MediShield Life allows Singaporeans and their dependents by covering for serious illnesses and old age.

Employers can consider purchasing extra coverage that is not already provided by MediShield Life.

Work Permit & S Pass holders

Work Permit and S Pass holders are not covered under MediShield. However, you still have to buy medical insurance plans for them. Moreover, the coverage for medical insurance has to be maintained until they are no longer employed by you.

Employment Pass (EP) holders

EP holders are also not covered by MediShield contributions. Nonetheless, employers can still buy private medical insurance for them as employment benefits.

One example of private medical insurance you can purchase for EP holders is a Group package. These Group packages typically include personal accident, dental, maternity cover and hospitalization.

Another way to protect EP holders is to subsidize the costs of their own Integrated shield plans that they have already purchased from a insurance provider.

2. Work injury compensation (WIC) insurance

WIC covers your business when an employee files claims for diseases or injuries that happened during work.

Under the Work Injury Compensation Act (WICA), every employee is legally obligated to buy WIC for both foreign and local employees who engage in:

1. Non-manual work, and are earning $2,600 and below per month; and

2. Manual work, at every salary level

Do note that these are not applicable to independent contractors or freelancers that you engage with. Employers will be fined up to $10,000, jailed up to 12 months, or both if they fail to provide WIC. These sentences only apply to first-time offence.

WIC is crucial, especially for businesses that are engaged in construction because their workers are more prone to injuries.

WIC allows covers for expenses incurred by workers or payment of medical leave wages should they suffer from any accidents during work.

Medishield contributions and WIC insurance are compulsory, which is why your business must prioritize these two insurance types first, before considering to buy other types of insurance for your employees.

3. Property

Property refers to any fixtures and fittings, stocks, plant, equipment, furniture. buildings or machinery, etc. that your company owns. Property insurance can help you to cover damages or losses to these properties. More specifically, property insurance can help cover for the following:

1. Business interruption insurance to protect your business in the case of lost wages, revenue, or concurrent expenses gained from suspended operations as a result of material damage from floods or fires

2. Theft insurance for robbery or burglary

3. Fire insurance which is not only for fire, but also floods and lightning

4. Terrorism Insurance when the unlawful use of violence against property or people happens

5. Select insurance plans that are meant for risks in your business industry. For instance, logistics companies that provide shipping services can consider buying marine insurance plans to protect themselves during transit

To decide which property insurance to buy, you can try making a list of the most pressing threats to your business. From there, I will be able to help you narrow down the best plan that can suit your business's needs.

In conclusion, there is a huge range of insurance types out there in the market, but they can be generally typed as Legal Liability, Employees and Property. There are quite a few insurance plans that you can get under each of these categories, and I can help you to decide which to choose. Feel free to contact me at 96891153 to learn more.