We are often asked by clients, “Why do we need Work Injury Compensation Insurance when we already have Group Personal Accident Insurance in place for our employees?” Although both insurances provide cover for accidental bodily injuries, they are two vastly different products with distinct coverage intentions.
Work Injury Compensation Insurance is intended to specifically cover claims situations arising from work accidents, while Group Personal Accident insurance provides more of a general accident cover. Group Personal Accident insurance does not sufficiently cover the employer’s liability in work accident situations and should never be used as an alternative to replace Work Injury Compensation insurance.
GROUP PERSONAL ACCIDENT INSURANCE (GPA)
A typical Group Personal Accident (GPA) policy offers worldwide, 24-hour coverage in the event of accidental bodily injuries. That is, if an insured person suffers an accidental injury anytime anywhere, they are covered by Personal Accident Insurance.
Death – A lump sum benefit payable upon death due to an accident.
Permanent and Total disability – Pays a lump sum upon the insured person suffering permanent incapacitation due to an accident.
Temporary Total/Partial disability – Amount payable to the insured person for the period when the insured person is temporarily disabled.
Medical expenses – Covers the insured’s medical expenses for treatment of accidental injuries.
Other optional extensions which can be added to the Group Personal Accident Insurance include hospital recuperation, ambulance costs, fracture benefits, and funeral expenses.
WORK INJURY COMPENSATION INSURANCE (WICA)
The work injury compensation policy covers accidental injuries arising out of and in the course of work. Under the Work Injury Compensation Act (WICA), all employers in Singapore must take up Work Injury Compensation insurance covering all manual workers and employees earning less than SGD$2,600* per month. For employees that do not fall into these categories, it is not mandatory under the Act to purchase insurance, however, the employer is liable to compensate these employees if they are injured in the course of work. The WICA intends to allow employees to make claims for work-related injuries without having to file a civil suit. It is a more cost-effective and efficient alternative to litigation in the settlement of workplace claims.
In addition to direct physical injuries sustained at work, Work Injury Compensation Insurance covers occupational diseases like asbestosis (exposure to asbestos fibres), noise-induced deafness (prolonged exposure to excessive noise), and diseases from biological agents due to work (including COVID-19).
Medical Leave Wages - When an employee is injured in the course of work, the employer is required to continue paying the employee’s wages during their medical leave period. For hospitalisation leave, the employer must pay full wages for up to 60 days and 2/3 of wages thereafter for up to 1 year from the date of the accident. For outpatient leave, full wages are paid for up to 14 days and 2/3 of wages for up to 1 year from the date of the accident. Work Injury Compensation Insurance reimburses the employer for the wages paid to the employee during this period of medical leave.
Death & Permanent Incapacity - When an employee is deemed to have suffered an injury that results in death or permanent disability to work, a compensation amount of up to SGD$289,000* for permanent incapacity and SGD$225,000* for death can be awarded. The compensation amount is calculated based on the employee’s salary, age, and degree of incapacity.Common Law - This item of coverage is not within the WICA. However, it is offered as a standard in most Work Injury Compensation Insurances. Under most circumstances, an injured employee is satisfied with the compensation afforded under the WICA. However, if an employee feels the compensation based on the Work Compensation Act is insufficient or if the employee feels the employer had been negligent, they can take Common Law action against the employer. While it is rare now, back in the 2000s, some law firms deployed runners in hospitals to “assist and educate” injured workers about their options to take legal action against their employers. If an injured employee commences litigation against their employer, the Work Injury Compensation insurer will step in with their legal team to either defend the employer or negotiate a settlement with the employee’s lawyers.
WITH YOU ALL THE WAY
Do reach out if you would like to find out more about these classes of insurance and how they can be tailored to provide comprehensive accident coverage for your employees.
Claims Manager – Asia
*Figures correct as of 2022.