SME Insurance Must-Haves to Protect Business Risks

There are an estimated 291,000 small and medium-sized enterprises (SMEs) in Singapore and together they account for 71% of all employment and contribute more than S$212B to the economy (in 2021). SMEs are defined as companies with annual turnover of less than S$100M or employs less than 200 workers.

Running a business is not without risks. Therefore, it is important for SMEs to understand the various business insurance to better protect our assets, liabilities and employees from the risks associated with operating a business.

Now as we start the new 2023 year, it is a good time for us as business owners to review if we have our business risks adequately covered. Let’s take a look at some of the SME insurance available that can help us manage the risks.

1. Public Liability Insurance

In running a business, one of the last things we want is a lawsuit filed against us due to our negligence in business practices. Negligence implies not taking proper action in regard to a reasonably foreseeable event; it has nothing to do with our intention. Public Liability Insurance protects our business financially from any claims that arise in relation to damage or injuries sustained by third parties and/or their property during our usual business activities. Most businesses will find public liability insurance relevant to them, especially those businesses that carry significantly higher risks. If our business involves any of the following, we should consider Public Liability Insurance:

Manufacturing or repairs works

Working in areas not owned by our business

Regular visitors to our work premises

Direct interactions with our customers

2. Professional Indemnity Insurance

Not having enough Professional Indemnity (PI) Insurance (which is also known as Professional Liability Insurance) can put our finances and even our business at risk, if we are running a business which involved providing advisory and consultancy services, eg. medical doctor, lawyer, financial adviser, business consultants etc.

This insurance protects a professional such as an accountant, solicitor, architect and engineer against his legal liability to pay damages to persons who have sustained financial loss arising from his own professional negligence or that of his employees in the conduct of the business. The insurance offers indemnity strictly on legal liability basis. The PI insurance also indemnifies him for defence cost and expenses incurred in respect of a claim.

3. Business’ Assets Insurance

It is highly recommended that SMEs should consider an all-risk property insurance policy which compensates the business in the event of losses or damages to our property (including goods-in-transit in Singapore) which arise due to perils which were not anticipated. Some of the coverages which are available under such insurance policy are business interruption due to burglary, fire, machinery breakdown, explosion etc. 

4. Employees’ Protection Insurance

Employees are one of the most important assets to our businesses. Over 70% of 3.5 million Singaporeans are working in SMEs. Taking care of our employee’ well-being benefits the business. If employees are happy and well, they’re more productive and so the business thrives. Under the Work Injury Compensation Act (WICA), it is mandatory to protect our employees against work accidents or illnesses for:

• All employees doing manual work, regardless of salary level
• All employees doing non-manual work, earning less than SGD2,600 a month

SMEs have the option to purchase Employees’ Benefits coverage for other employees or provide some of the following:

• Group Term Life Insurance: provides a lump sum benefit upon death; total & permanent disability; or upon diagnosis of a terminal illness.
• Group Critical Illness Insurance: provides a lump sum benefit upon diagnosis of any insured critical illnesses.
• Group Hospital & Surgical Insurance: reimburse eligible expenses incurred in the event employee is hospitalised.
• Group Personal Accident Insurance: provides a lump sum benefit upon death due to accident; total & permanent disability due to accident; or other losses due to accident as listed in the schedule of benefits.
• Group Disability Income Insurance: provides a fixed and regular benefit in the event an illness or accident suffered by an employee leaves him incapable of engaging in his own or any occupation.
• Group Out-Patient Insurance: provides reimbursement of outpatient expenses incurred in clinics.
• Group Dental Insurance: provides reimbursement of eligible dental expenses.

Get insured with the right help.

Having an expert on your side to help you pick the right insurance plan and find the best price can be a big help. If you need help finding the right insurance coverage, consider working with an experienced broker like eazy. Our team can advise you on various insurance plans, including motor, health, corporate, lifestyle, and marine coverage. Speak to us today to get your insurance needs covered.