Top 3 Insurance Policies For Employees In A Small Business

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Top 3 Insurance Policies For Employees In A Small Business

Running a small business can be very challenging – business owners often rely on small teams of employees, so it’s doubly important that each employee gives their absolute best every day so your business can flourish. If one, or even several employees become sick or injured, their absence can put noticeable strains on the smooth running of the business.

Employees getting sick or injured while on the job also creates serious liability issues for small business owners. Under the 2012 Work Injury Compensation Act (WICA) in Singapore, companies are legally required to provide WICA insurance for any employees who earn less than $1,600 a month, or for any employees who perform manual labour. The WICA statute also requires employers to compensate employees up to $73,000 for work-related injuries. If you have multiple employees getting injured in a single year, these costs very quickly add up and become a significant burden on the company’s cash position.

The potential to be hit by significant costs related to employee injuries means that small business owners must take appropriate steps to protect themselves. Here are the 3 best insurance policies that company owners should have to protect their business and their employees:

#1. Work Injury Compensation Insurance (WICA Insurance)

Work Injury Compensation Insurance protects businesses from legal liability when employees become injured or sick due to work-related causes.

What WICA Insurance covers: WICA insurance covers legal expenses to defend against work-injury lawsuits. It also covers employee medical expenses for injuries or illnesses sustained from work.

Employer Coverage:

  1. Lawyer’s fees for employee injury/sickness lawsuits
  2. Legal damages for employees injured/sick for work-related reasons

Employee Coverage:

  1. Medical expenses
  2. Lost salary while on medical leave (includes salary, bonus, overtime pay, food and housing allowances, but excludes CPF payment)
  3. Lump sum compensation for death, or total permanent disability

What WICA Insurance doesn’t cover:

  • Self-employed individuals
  • Pre-existing conditions
  • Self-inflicted injuries
  • Workplace fights
  • Injuries or illnesses that occur outside of work-related causes
  • Injuries or illnesses that occur in violation of company policies
  • Injuries or illnesses that occur from drug or alcohol use

How much WICA Insurance should small businesses have?

For small businesses, it’s advisable to have between $50,000 to $100,000 in Work Injury Compensation coverage per employee. Lower risk occupations involving mostly desk-bound work, or light outdoor supervisory roles can make do with $50,000. Manual workers should have at least $100,000.

Under Singapore law, businesses must cover their employees for the following minimum sums:

Death coverage: $57,000

Permanent disability coverage: $73,000

Medical expenses coverage: Up to $30,000, or 1 year of expenses from the date of accident, whichever is reached first

How much does WICA Insurance cost?

Non-Manual Worker: Starts from $25/year, per worker

Manual Worker: Starts from $50/year, per worker

As you can see, this type of coverage is very affordable for the benefits you’re getting! Prices may be higher for certain higher-risk industries, like manufacturing.

Get your instant WICA Insurance quotes here! With Provide, you save up to 25% on your premiums. Our digital operating model creates lower overheads, and we pass every dollar saved back to our clients.

#2. Group Personal Accident Insurance

Group Personal Accident Insurance protects employees if they suffer serious accidents, or accidentally die. This policy will provide cash payouts for accidental injuries or death, and also pays for employee medical expenses.

Singapore’s tight labour market means that small businesses face strong competition to hire and retain the best employees. Today’s workers increasingly expect good healthcare benefits from their companies. It’s become very common for business owners to offer good benefits (beyond just salary raises) as a strong employment incentive. A comprehensive Group Personal Accident policy is a great way to retain and attract talented employees. It’s also a fantastic method to keep employees safe, protecting your staff and their families from huge medical bills.

What Group PA Insurance covers:

  • Loss of Body Parts/Body Functions: Pays a lump sum for loss of arms, hands, fingers, legs, toes, sight, hearing, and more.
  • Total Permanent Disability: Pays a lump sum for permanent inability to work. Some insurers may have alternative definitions of this condition, like loss of a minimum number of specific body parts/functions.
  • Accidental Death: Pays a lump sum.

The following coverage features are offered in various combinations, depending on the insurer:

  • Medical Expenses/Hospital Cash: Pays for medical fees (up to a specified amount). Pays a daily hospitalisation benefit.
  • Temporary Disability (Partial/Total): Pays a daily cash benefit while temporarily disabled and unable to work.
  • Family Cover: Automatically covers employee’s child & spouse.
  • Reservist Cover: Covers employees performing reservist duty.

What Group PA Insurance doesn’t cover:

  • Individuals over 65-75 (depends on the policy)
  • Suicide
  • Pre-existing physical or mental defect or infirmity
  • Illness, diseases, infections, AIDS, HIV, and HIV-related illnesses
  • Childbirth, miscarriage, pregnancy or any other complications thereof
  • Injuries or death from criminal acts
  • Professional sports activities of any kind
  • Hazardous sports activities such as mountaineering, cave exploring, parachuting, hang gliding, hunting, racing of any kind (other than on foot), scuba-diving, bungee jumping and water ski jumping
  • Pilots or cabin crew, unless they’re travelling as fare paying passengers
  • Radioactive and nuclear weapon material accidents

How much Group PA Insurance should small businesses have?

Companies should look into having between $100,000 to $500,000 in coverage per employee. Lower coverage amounts are perfect for small companies that are looking to offer more than just salary as performance incentives, but are still operating on a lean budget. Higher coverage amounts are well suited for medium sized firms with larger salary budgets, that want to provide more competitive hiring and retention incentives.

Business Package Insurance will usually come bundled with Group PA insurance. However, this bundled Group PA insurance is most commonly only for 1-2 directors/officers. If you want to cover your staff, make sure to get a standalone Group PA policy.

How much does Group PA Insurance cost?

Premiums usually begin from $50/employee, for $100,000 in annual coverage.

With Provide, you’ll save up to 25% on premiums, with broad coverage & high indemnity policies guaranteed. Our digital operating model creates lower overheads, so we pass every dollar saved back to our clients.

Interested in protecting your employees with Group PA insurance? Get your Group PA insurance quote today!

#3. Group Health Insurance

Group Health Insurance is another strong incentive for hiring and retention. Given the high and increasing cost of healthcare in Singapore, employers that can offer good health insurance coverage for their staff immediately become highly attractive companies to work for. A 2018 survey found that health insurance was the number one benefit employees want when deciding which company to work for.

What Group Health Insurance covers:

The table below provides a broad overview of available coverage by plan type:

Coverage Inpatient Inpatient + Outpatient Inpatient + Outpatient + Vision + Dental
Annual Premium Starts from $400/staff Starts from

$600/staff

Starts from

$800/staff

Inpatient Treatment
Hospital room
Intensive care
Prescription medicine
Doctor/specialist fees
Surgeon’s fees
Anesthesiologist fees
Laboratory and diagnostic tests
Outpatient Treatment
GP consultation
Specialist consultation
Outpatient medical procedures (e.g. day surgery)
Prescription medicine
Physiotherapy
Home nursing
TCM/Chiropractor treatment
Psychiatric treatment
Dental Benefits
Routine dental work (scaling, polishing, fillings, simple extractions)
Complex dental work & major restoration (e.g. root canal, jawbone surgery)
Vision Benefits
Eye examination with optometrist or ophthalmologist
Contact lenses, corrective lenses, glasses frames

 

Common add-ons to Group Health Insurance:

The following types of coverage are usually purchased as a separate add-on to Group Health policies.

Critical illness: Critical illness protection gives you a lump sum cash payout in the event of major illnesses like:

  • Cancer
  • Organ failure
  • Heart attack
  • Stroke
  • and many more

Hospital Cash: Pays out a daily cash benefit while the insured is hospitalised. This helps defray the impact of lost wages while the person is recovering.

Maternity Benefits: Pays for pre-natal, childbirth, and post-natal treatments.

What Group Health Insurance doesn’t cover:

Pre-existing conditions: Most plans will ask each insured to declare pre-existing conditions, which will be excluded from coverage. If you need protection for a condition you already have, speak to an experienced broker like Provide, who can help you arrange coverage for certain pre-existing conditions.

Employees over 65-80 years old: The exact age at which applications are not accepted differs between different plans, but most insurers will not offer Group Health policies to new applications over 65-70 due to significantly increased health risks.

If you’re already insured by a Group Health Insurance plan, then most insurers will continue to cover you up till 70-80 years old.

Companies with fewer than 3 employees: Group health plans cost less per person than individual health plans, so a minimum size is necessary for insurance companies to provide savings.

How much Group Health Insurance should small businesses have?

Most small businesses will do well with an inpatient plan with annual coverage of up to $250,000. Inpatient H&S policies will protect employees from diseases or accidents that require expensive medical procedures to treat. It is precisely these large, out-of-pocket financial burdens that workers want to avoid and will need the most assistance to deal with. Consequently, companies that help employees with these costs already provide a significant incentive.

Plans that include outpatient treatment will often command a sizeable premium over inpatient-only plans. Consider undertaking an outpatient plan if your business is growing quickly, and you want to attract the best talent by offering comprehensive employee benefits.  The highest-end plans with vision and dental benefits are usually suitable for mid-sized companies that have more resources to spare.

How much does Group Health Insurance cost?

These are the typical prices SMEs can expect for Group Health Insurance:

Plan Type Annual Premium
Inpatient Starts from $400/employee
Inpatient + Outpatient Starts from $500/employee
Inpatient + Outpatient + Vision + Dental Starts from $600/employee

Annual premiums are largely based on: age and health condition of insured, and the number of insureds. The prices above are typical for staff in their 20s to 30s. Staff in their 40s and above may pay 30-50% more, to account for increased health risks.

Provide helps businesses get broad cover, high indemnity health insurance. Our experts have decades of experience crafting tailored health insurance plans for business owners. Contact us today for an expert consult on health insurance!

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