THE ESSENTIAL INSURANCE CHECKLIST FOR NEW SMES IN SINGAPORE (THE 4 POLICIES YOU CAN'T IGNORE)
Starting a business in Singapore? Make sure you’re protected from day one. This checklist covers the 4 must-have insurance policies every SME should consider — from employee coverage to liability protection.
LOOKING FOR CORPORATE INSURANCE?
You did it.
After countless late nights, endless cups of coffee, and a whole lot of courage, your business is finally a reality. You’ve registered your company, built your product, and you’re ready to take on the world. The feeling is incredible.
You’ve built your business from the ground up. Now, it’s time to build its shield.
It’s easy to get caught up in the excitement of making sales and finding customers. But here’s a sobering thought: one single, unlucky event can sink a new business before it even has a chance to swim.
A client claims your work caused them a huge financial loss. An employee gets injured on the job. A fire destroys your new office equipment. Without a proper shield, these events can be fatal for a startup.
This guide is your simple “starter pack” for business insurance. No jargon, no complicated terms. Just the four foundational policies that every new SME owner in Singapore needs to consider to stay safe and sleep soundly at night.
1. The Legal Must-Have: Work Injury Compensation Insurance (WICA)
Let’s start with the one that isn’t optional. If you have employees, you need to know about WICA.
What it is, in simple terms:
The Work Injury Compensation Act (WICA) is a law in Singapore. It says that employers are responsible for the medical costs and lost wages of their employees if they get injured or fall sick because of their job.
Work Injury Compensation Insurance is the policy you buy to cover these costs.
Do you need it?
Under Singapore law, you must buy this insurance for two types of employees:
- All employees who do manual work, regardless of their salary.
- All employees who do non-manual work (like office workers) and earn $2,600 a month or less.
Even if your employees don’t fall into these categories, it is still highly recommended to have this coverage.
What it covers:
- Medical expenses from the work-related injury or illness.
- Lost wages while your employee is on medical leave.
- A lump-sum payout for permanent disability or death.
The consequence of not having it:
The Ministry of Manpower (MOM) is very strict about this. If you are required to have WICA insurance and you don’t, you could face heavy fines and even jail time. It’s absolutely non-negotiable. This should be the very first policy you look into once you hire your first employee.
2. The “Slip and Fall” Protector: Public Liability Insurance
Imagine this scenario:
A potential client comes to your new office for a big meeting. The floor was just mopped, and they slip, fall, and break their arm. They need surgery and are out of work for weeks. They hold you responsible and sue your company for their medical bills and lost income.
Who pays for that? You do. Unless you have Public Liability Insurance.
What it is, in simple terms:
Public Liability Insurance protects your business if someone (who is not your employee) gets injured, or their property gets damaged, because of your business activities.
This “someone” could be a client, a delivery person, a vendor, or just a random member of the public.
Why you need it:
You need this if your business interacts with the public in any physical way.
- Do clients or partners visit your office, shop, or workshop?
- Do you or your employees work at your clients’ premises?
- Do you participate in public events or exhibitions?
If you answered yes to any of these, you have a public liability risk. A simple accident can lead to a lawsuit that could easily cost tens of thousands of dollars in legal fees and compensation. This policy is your shield against those “slip and fall” moments and other unfortunate accidents.
3. The “My Advice Was Wrong” Safeguard: Professional Indemnity Insurance
This one is for all the service-based businesses out there. If you provide professional advice or services for a fee, this is arguably the most important insurance you can have.
Think about businesses like:
- IT consultants and software developers
- Marketing and PR agencies
- Architects and engineers
- Business consultants and coaches
- Designers and creative studios
Now, imagine this scenario:
You run a small digital marketing agency. You advise a client on a big campaign, but you make a mistake in the ad targeting. The campaign flops, and the client claims your bad advice cost them $50,000 in lost sales. They sue you for negligence to recover their losses.
What it is, in simple terms:
Professional Indemnity (PI) Insurance protects you from claims of financial loss that happen because of a mistake or negligence in your professional service or advice.
It covers:
- The legal costs to defend yourself in a lawsuit (which are very expensive).
- The compensation or damages you may have to pay to the client if you are found liable.
Why it’s so important:
We are all human, and mistakes happen. A small oversight, a missed deadline, or an unintentional error can lead to a huge financial loss for your client. In today’s world, clients are not afraid to sue. PI insurance ensures that one human error doesn’t end up destroying the business you’ve worked so hard to build.
4. The “Office and Stuff” Cover: Commercial Property Insurance
You’ve spent a good amount of money setting up your new business space. You’ve done renovations, bought laptops and office equipment, and maybe you have some valuable inventory or stock.
Now, ask yourself this scary question:
“If my office had a fire tonight and everything was destroyed, could I afford to buy it all again tomorrow and keep my business running?”
For most new SMEs, the answer is a hard “no.”
What it is, in simple terms:
Commercial Property Insurance (often sold as part of a “Business Package”) protects your physical business assets from unexpected events like fire, floods, explosions, or theft.
What it covers:
- Renovations and fit-outs: Your glass partitions, flooring, and built-in cabinets.
- Contents: Your desks, chairs, and office furniture.
- Equipment: Your computers, printers, servers, and any specialised machinery.
- Inventory: The stock or goods you hold for sale.
This insurance ensures that a physical disaster doesn’t also become a financial disaster. It gives you the funds to get back on your feet, replace your essential equipment, and reopen your doors as quickly as possible.
Conclusion: Your Business Insurance Starter Pack
Starting a business is like captaining a new ship. There will be unpredictable storms. Insurance is the life raft that ensures you and your crew can survive them.
You don’t need to buy every single policy on day one. But these four policies form the essential “starter pack” for almost every new SME in Singapore:
- Work Injury Compensation (WICA): The legal must-have for your employees.
- Public Liability: The “slip and fall” protector for your interactions with the public.
- Professional Indemnity: The “bad advice” safeguard if you provide professional services.
- Commercial Property: The “office and stuff” cover for your physical assets.
So, here’s your call to action. Take a few minutes this week to review your business model against this checklist.
Which of these four risks apply to you?
Securing the right coverage isn’t just another expense on your balance sheet. It’s one of the most important investments you can make in the survival and long-term success of your business. Build your shield today.