Sterling Knight COO Blog

New Work Injury Compensation Bill Increases Statutory Liability of Employers

The Ministry of Manpower recently published details of the Work Injury Compensation (Amendment) Bill 2011, which is scheduled to come into effect 1st July 2012. I summarize the main points we feel are relevant to employers in Singapore and their insurers. I also comment on best practice for insurance arrangements, given the new law.

Salient points of the Bill which will impact employers:

1. Statutory no fault limits under the Work Injury Compensation Act will be increased to SGD170,000 for death and SGD280,000 for permanent incapacity. The current limits are SGD140,000 for death and SGD180,000 for permanent incapacity. This is to account for wage inflation since the last amendment in 2008. Also, in a similar vein, the medical expenses limit will be increased to SGD30,000 (currently SGD25,000).

2. Scope of Work Injury Compensation for occupational diseases extended. Specifically, work related injuries as a result of exposure to chemical or biological agents will automatically be compensable, including new diseases. Currently, only diseases listed in the Second Schedule of the Act (e.g. noise induced deafness) would be compensable and a new deadly flu strain, would not be compensable unless included in the Schedule. Under the new bill, the employee must still prove that he was more likely than not exposed at work, and not as a result of community spread.

3. Liability of Work Related Fights reduced. If the injury is due to a fight between employees at work (Ministry of Manpower receives about 20 such cases a year), this would not be compensable if the worker was an active party to the fight.

Salient points which will impact insurers:

1. In situations where there are multiple policies involved, the employer's Work Injury Compensation insurer cannot deny liability on the basis of the existence of other insurance covering the employee.

2. An exception to this is that third parties will be allowed to pay compensation as long as they convey in writing to the Ministry of Manpower the intent to pay compensation on behalf of the employer's insurer, before the notice of assessment is issued.

Best practice to ensure compliance with the new bill:

1. Ensure that appropriate Work Injury Compensation Insurance Act Insurance is taken up, and declare the full payroll of all employees,  including wages, bonuses, annual wage supplements, food and housing allowances, and overtime (but excluding travelling allowances and CPF contributions) to the insurers.

2. Use a dedicated Work Injury Compensation Insurance policy issued by a Singapore licensed insurance company. Do not use Personal Accident Insurance to cover Work Injury Compensation liability as personal accident policies do not cover occupational diseases. The New Bill's extension to new occupational diseases makes Personal Accident policies, which covers death or permanent major injury (only) due to accident totally inappropriate for covering Work Injury Compensation Liability. 

The full speech on the amendment bill delivered in the Singapore Parliament on 21st November 2011 is available on the Ministry of Manpower's website.

Sterling Knight Successfully Participates in the 2011 Global Internship Program

Our insurance broking firm is proud to announce our participation and completion in this year’s Global Internship Program (GIP) hosted by the General Insurance Association of Singapore and supported by the Monetary Authority of Singapore. The GIP is a unique, cross-disciplinary program that provides undergraduates from various backgrounds with valuable insights into the general insurance industry in Singapore.

In the words of our COO, Lawrence Adam, “Our insurance broking firm has expanded with a greater international focus in recent years in the areas of corporate general insurance and employee benefits. Sterling Knight believes in developing local talent with an interest in insurance as a career path by providing mentorship, global exposure and learning opportunities. We believe that the GIP's pool of smart, driven and principled candidates and its structured selection and placement is a good match for Sterling Knight to further enhance our corporate values of integrity, trust and speed.”

As the intern successfully recruited under the GIP, I consider myself extremely fortunate to be part of this irreplaceable experience working under the mentorship of a professional and highly capable team of colleagues. The three months I spent under the GIP has indeed cemented my perspective of the insurance industry and led me to a career that is both fulfilling and dynamic.

GIP has given me exposure to the vibrant and exhilarating environment that is the general insurance industry, and I have not looked back ever since. I strongly urge interns from the ensuing batches to take that step and allow themselves to be inspired by the world of possibilities in this industry.

For more information on the Global Internship Program, visit: http://www.gia.org.sg/gip/

Compensation for Death on Work Trip under the Work Injury Compensation Act

Under the Work Injury Compensation Act (Cap. 354) (WICA), “accidents arising out of and in the course of employment that occur outside Singapore are covered under the WICA where (a) the employee is ordinarily resident in Singapore; (b) the employer is based in Singapore; and (c) the employee is required in the course of his employment to work outside Singapore.” The article “Compensation for death on work trip” published by the Straits Times on 6 September 2011 demonstrates the contentious issues that typically arise when fatalities arise on work-related trips. As such, we recommend that corporations operating in Singapore be fully aware of their potential liability to their employees arising under the WICA.

In this instance, the employee in question represented his firm at an anniversary dinner in Cambodia, but was found dead in his hotel room the next day. The lower court held that the death was not to be covered under WICA as there was no evidence to suggest the employee did actual work during the trip. The High Court ruled that the trip constituted employment, as it was sanctioned by the employer. The death was concluded to be an accident that happened in the course of employment, which made compensation payable under the WICA, thereby evidencing the government’s commitment to keep pace with changing realities as more Singaporeans travel abroad for work.

Ministry of Manpower Announces Increased Number of Fall from Height Accidents

A recent press release from the Ministry of Manpower cites an increased number of accidents (13 as at June 2011) resulting from falls from heights. Warning were issued to 150 contractors on this issue.

Insurers will face hefty flood of claims from Thailand

Our partner, William Gallagher Associates, report severe losses in Thailand, exceeding USD3bn.

Ministry of Manpower's September 2011 Guide to Workplace Safety and Health – New Standards to be Aware Of

The Guide to Workplace Safety and Health (WSH) by Singapore’s Ministry of Manpower provides information on the extended coverage of the Workplace Safety and Health Act 2006 (the Act) from Phase 2, i.e. medium risk workplaces, to Phase 3, i.e. all workplaces including offices and all stakeholders will be covered by this new subsidiary legislation of the Act as of September 2011. The key principle of the Act is as follows:

“Each and every stakeholder has the duty to take, so far as is reasonably practicable, such measures as are necessary to ensure safety and health for any person who may be
affected by his undertaking in the workplace.” 

This will undoubtedly have significant impacts on business owners, managers, supervisors and rank-and-file employees alike as they have to take reasonable measures to find out and control risks at the workplace through safe work methods. Thus, it is pertinent that we prepare for this new subsidiary legislation come September.

Some details of this new subsidiary legislation are further elaborated in a report by Liberty International Underwriters, which lays out its key principles and practical implications.

• Download Liberty International - Workplace Safety & Health Act (Sept 2011)

Under the Act, employers and various other stakeholders are responsible for mitigating risks at work by establishing adequate safety management systems, failing which could result in strict penalties. In addition to the existing basic protection and compensation for employees as stated in the Work Injury Compensation Act 2008, one of the highlights of the new subsidiary legislation is the need for a Risk Management programme that specifically targets risks at one’s workplace so that business owners can minimize and control them. Businesses can benefit from a proactive attitude towards risk management, as employers can keep employees safe, ensure smooth business operations and increase productivity in the long run. The efficiency of a firm's Risk Management Approach can be measured against several benchmarks – e.g. the Management’s Commitment to ensure safety responsibilities are made aware to employees; establishing a Risk Assessment team within the organization to identify, evaluate, control and keep records of workplace risks; ensuring that all work-related incidents are covered by work injury compensation insurance and all incidents are reported within the required timeline and acted upon as stipulated by the law.

For additional information on how the new subsidiary legislation affect your business, as well as the measures that should be implemented to prevent injuries from non-manual work hazards, we recommend reviewing the WSH Guide at the following link:  

https://eu1.salesforce.com/sfc/p/200000009E7d.q1Maj74fqcjLuWy5yMWh1ZBaP4=.

 

Corporate Travel Insurance on an Unnamed Basis

Corporate travel insurance protects the organization against extraordinary expenses that can incur whilst employees travel either internationally or domestically while on business. The cover for travel insurance policies typically include expenses for medical and dental treatment; flight cancellations; emergency evacuation and repatriation of remains; accidental death, injury or disablement benefit; personal property; legal assistance; hospital confinements; and travel assistance services.

Group Travel Insurance policies can typically be arranged on either one of the following 2 ways – Named basis insuring specific personnel and/or Headcount (unnamed) basis on a fixed number of unnamed personnel; the latter usually requires groups of 5 and above to be under the policy. If the company wishes to insure on a Headcount basis, the premium will be the rate applicable for the risk profile of each worker multiplied by the annual wage of the worker.

Let us assume there are a total of 20 employees in a company, out of which 15 are frequent travelers, and the company wishes to take up a Corporate Travel policy on an unnamed basis. If a subgroup of, say, 5 employees are travelling at any one time, employers should still insure the total number of travelers as 15 rather than 5. It would be best to present to the insurer a “trip pattern” that provides details of the total number of trips per year and the destination of these trips. In this instance, the employer will declare that there are 15 Travelers going to an estimated 50 trips per annum – 30 trips to Asia, 20 trips worldwide. It would suffice to provide the insurer with estimated figures. This way, the employer does not have to repeatedly inform the insurer the identities and number of employees each time a trip is made on an unnamed basis, as all 15 of them would be covered.

In the event of an insurance claim, what the company needs to do is to submit a brief letter (with company letter head) indicating that the person is intended to be on the travel policy. This letter should be accompanied by the insurer’s claim form. 

 

Podcast: Singapore Employee Benefits

We collaborated with one of our US partners, Woodruff Sawyer & Company to develop this podcast, which was recently published on the company's Employee Benefits blog. In this podcast, our COO, Lawrence gives an overview of the local business environment, key issues that branch operations of US companies in Singapore need to address, as well as the local statutory and customary employee benefit practices. 

Check out the podcast at the following link: http://www.wsandco.com/about-us/news-and-events/podcasts/employee-benefits/benefits-in-Singapore

Sterling Knight Achieves Chartered Status

 

 

I'm proud to announce that the Chartered Insurance Institute has awarded "Chartered Insurance Broker" status to our firm, Sterling Knight. For more information see our press release.

Minister of Manpower: Business Chambers Can Help Increase Productivity of Small and Medium Sized Enterprises

The Minister of Manpower recently gave an interesting speech on how SME's can leverage collaboration and industry networks to boost international business, The full speech is available on the Ministry of Manpower's website.

Software Companies lost USD233m in Unlicensed Software in Singapore

According to a local press article, the Business Software Alliance measured software piracy at 34% in Singapore (4th lowest in Asia), even though the percentage was reduced by 1% in 2010.