Corporate insurance aims to meet the unique demands of businesses and safeguard all their assets and interests. Just as people seek protection against common dangers, it is also crucial to protect organisations against certain risks inherent in commercial operations. The lack of business insurance can cost organisations in Singapore most substantial losses in the long run.
5 Types of Business Insurance Every Company Needs
Properly insuring your business allows you to focus on growing profitability and production. Starting on customised business insurance is the best investment you can make for your company if you are a business owner. The following are five main categories of business insurance covering every possible cost for companies in Singapore.
#1 Corporate Property
Mishaps can happen at any time. There is nothing you can do if a natural calamity happens. Furthermore, machines can suddenly malfunction and criminals can target your business at any time. For these reasons, four types of corporate or business property insurance cover the cost of damages for firms in Singapore.
1.A. Property
Property insurance protects your buildings, plant and machinery, equipment, stocks, renovations, furnishings, fixtures, fittings, etc. Businesses can set up this coverage as ‘All Risks’ or ‘Fire and Extraneous Perils’. The former is a more comprehensive coverage since it includes accidental loss or damage to covered company property unless expressly excluded in the policy.
1.B. Theft/Burglary
It is a type of business insurance that covers any cost businesses in Singapore incur due to theft or burglary. Properties included in this insurance policy are office equipment, machinery, stock-in-trade and business goods.
1.C. Business Interruption
The Firm Interruption coverage aims to help put businesses back in the same financial position if the covered property had not been lost or damaged. Companies can tailor their business interruption policy to provide coverage for rental or temporary facilities, fixed operating costs, employee wages, etc.
1.D. Fidelity Guarantee
Fidelity Guarantee is a type of business insurance that covers any cost a company in Singapore incur due to acts of fraud, dishonesty, forgery, or theft. It protects the firm against direct financial loss from crimes perpetrated by workers as long as they are under their employment contracts and obligations.
#2 Employee & Health
This business insurance covers two of the most crucial policies for employees: the WICA and health insurance coverages.
2.A. WICA
The Work Injury Compensation Act (WICA) in Singapore obliges all companies to obtain work injury compensation insurance for local or international employees conducting manual or non-manual labour. Employers that fail to comply may face a fine of up to S$10,000 or a 12-month prison sentence. There are times that a firm will face both punishments. WICA also includes insurance policies that can insulate companies from legal liabilities stemming from Common Law claims by workers.
2.B Basic Medical
Every business must get health insurance covering any cost for hospitalisation in Singapore. The Employment Act compels all employers to contribute to CPF for all Singaporeans and Singapore Permanent Residents (PR). A part of the payment goes to Medishield Life, which offers life insurance against significant healthcare expenditures.
Employers must also purchase and maintain Foreign Worker Medical Insurance for S-Pass and Work Permit holders for their employment. This insurance covers non-work-related inpatient hospitalisation and day surgery charges of $15,000 per year.
However, the Medishield Life and Foreign Worker Medical insurance policies do not protect workers who are Employment Pass (EP) holders. Their employers may acquire group medical insurance to protect their personnel. It often covers group hospital and surgery, personal accidents, outpatient clinical/specialist consultation, and dental coverage.
#3 Legal Liabilities
Liability insurance protects companies from claims stemming from injuries and property damage. This type of business insurance helps cover any cost for businesses in Singapore from legal defence expenses. It can also include compensation that can hold the insured party legally accountable if proven to be at fault.
The following are the five most common legal liability insurance policies.
3.A. Public Liability
This business insurance covers any cost a company in Singapore can incur due to third-party claims for personal injury or property damage caused by activities and facilities.
3.B. Product Liability
This insurance policy protects your company from claims of personal injury or property damage caused by the items it manufactures, sells, supplies, or distributes.
3.C. Directors & Officers Liability
The directors & officers, or D&O, liability insurance bought by companies in Singapore are for their board and officers. It protects them from personal liability if someone sues them while in their role for actual or suspected unlawful actions.
3.D. Professional Indemnity
Professional indemnity insurance is a coverage policy that protects a company against legal action. It provides coverage for losses due to inadequate professional service or advice claims.
3.E. Advertising Liability
It protects firms against allegations of defamation and violation of copyright and intellectual property rights stemming from the company’s advertising operations and collateral.
#4 Commercial Motor
The Motor Vehicles (Third-Party Risks and Compensation) Act requires firms that possess commercial vehicles, such as a truck or van, to get Commercial Vehicle Insurance. Companies must ensure their vehicles have at least third-party coverage before driving them out on public roads.
#5 Industry Specific
This business insurance policy covers any cost for risks firms in Singapore may face that are unique to their sector. A transportation business or freight forwarder is liable for the products they convey and can get Cargo Insurance to cover the cargo while in transit. Before project/contract work can begin, a construction or engineering firm must get Contractors’ All Risks or Erection All Risks coverage.
Get Your Business Insured Now
Are you looking for business insurance to help cover any cost your firm in Singapore can incur due to damages and liabilities? Come and consult with BLACAZ.
BLACAZ. is a Singapore-based insurance firm that aims to help CEOs, CFOs, Entrepreneurs, and HR professionals navigate the challenging insurance business. Their objective is to make getting cyber and business insurance online as simple as possible for SMEs and startups. They offer policies for D&O insurance to professional indemnity insurance coverage to clients. Explore their website for inquiries and more information.
