Work Injury Compensation Insurance (a.k.a WICA insurance) protects your business from legal liability when your workers get injured. Under the Work Injury Compensation Act (WICA), businesses are legally required to compensate workers for medical expenses, lost wages, and damages if they get injured, or sick, from a work-related cause.
Work Injury Compensation Insurance pays for three expenses:
1. Medical expenses due to work-related injuries/sickness
2. Lost wages of employees while on MC, due to work-related injuries/sickness
3. Lawyer’s fees if the company gets sued by injured workers
Work Injury Compensation Insurance covers compensation & legal expenses for workplace related accidents to employees while performing their duties stipulated in their employment contract. Employers owe a duty of care to provide for workers injuries sustained during work, and are legally liable for compensation if their employees were to seek damages such as treatment cost, loss of income.
The policy will respond to claims made by the victims, as well as pay compensation if the court pass a judgement against the insured. These preventive measures should be widely adopted by all companies with the best interest of their employees.
Work Injury Compensation Insurance generally excludes coverage for:
- Injury due to alcohol or drug use
- Self-inflicted harm or suicide
- Workplace fights
- Injury or disease not directly related to work
If your business has at least one staff, you definitely need Work Injury Compensation Insurance for your business. Whether your staff is deployed at the backend/frontend of the business, there is always the possibility that they will get injured during work. Manual labourers face much higher risk of injuries, compared to a sedentary work employee and it is important to have them covered before the commencement of their employment.
Statutory regulations in Singapore requires employers to put in place Work Injury Compensation Insurance policies to protect the interest of manual workers and those who earn less than $2,100 per month, and companies are encouraged to insure these class of workers, if not all employees, so that it gives the staff the assurance that their welfare would be taken care of should workplace accidents do occur.
Regardless whether they are full-time, part-time or contract staffs, as long as there is evidence of a contract & under the company’s payroll, employers will have a legal responsibility to pay compensation if the injured employee(s) is to file a legal claim against their injuries.
Every employer is required by law to maintain adequate work injury compensation insurance for (i) all employees doing manual work, regardless of salary level, and (ii) employees doing non-manual work and earning $2,100 or less a month.
Failure to do so is an offence punishable by a maximum fine of $10,000 and/or imprisonment of up to 12 months. If you did not maintain adequate insurance (e.g. you have 10 manual workers but bought insurance for only 8 workers), you would have committed a criminal offence.
The amount of coverage needs to be above the statutory requirements, and the law breaksdown the compensation benefits into the following:
– Medical leave wages. These include (a) full pay up to 14 days for outpatient medical leave; and (b) full pay up to 60 days for hospitalization leave. Beyond these two periods, 2/3 salary is payable up to a maximum period of one year following the date of accident;
– Medical expenses. These include the medical treatment received by an employee in relation to his injury by accident arising out of and in the course of employment. It shall be the lower of the following amounts: (a) the cost of medical treatment received by the employee, up to one year from the date of the accident; or (b) $25,000 per accident per employee (for accidents that happen before 1 June 2012) or $30,000 per accident per employee (for accidents that happened on and after 1 June 2012); and
– Lump sum compensation for permanent incapacity (PI) or death, if any. The compensation amount payable is subjected to the following limits:
a) Death (min $47k, max $140k)
b) Permanent incapacity (Min $60k * %PI , max $180k * PI)
c) Medical expenses ( Up to $25k)
Some starting rates (which may vary depending on the industry):
Office-based: From $5/month, per worker
Outdoor supervisory: From $10/month, per worker
Manual worker: From $15/month, per worker
Insurers will assess the nature of the risk based on the industry type, the nature of the job, the worker’s age, the number of employees, as well as the past claims history of the applicant.
Manual labour workers (such as construction, factory workers) will demand a higher premium coverage due to alleviated risk of industrial accidents happening: Older workers are more prone to worksite injuries and likelihood of higher medical expenses will drive the premiums upwards.
Companies with good track records (i.e. no previous work injury claims), or companies which have attained the bizsafe accreditation from the Building and Construction Authorities (“BCA”) are likely to enjoy cheaper premiums on their Work Injury Compensation Insurance policies.
A local landscaping firm (Environmental Landscape Pte Ltd) was fined in 2018 for safety lapses that led to severe worker injuries. Three employees had been repairing an underground storage tank, when they switched on a floodlight. This caused an explosion that engulfed the workers.
See: Singapore company fined $220,000 after workers suffer severe burns from unsafe work conditions
Jurong Shipyard was fined in 2018, after a worker conducting safety checks was crushed to death by a crane.
See: Jurong Shipyard fined $230,000 over safety lapses that led to worker’s death
A local construction firm (Ava Global Pte Ltd) was fined in 2019 after a worker fell while replacing roof tiles. The employee was left paralysed for life.
See: Company fined $220,000 after worker paralysed from fall
A comprehensive Work Injury Compensation insurance policy will protect your company against such heavy legal liabilities.
Yes, the premiums you pay for Work Injury Compensation Insurance are fully tax-deductible. Do note that only the premiums you pay for workers that must legally be covered are tax-deductible.
In effect, this means that you can only deduct premiums paid for the following workers:
- Employees earning below $2,100/month
- Employees performing manual labour, regardless of salary level