Business and employee insurance: 14 questions employers ask
Some employee insurance is required by law; some is a benefit that helps keep good staff. These are the questions SME owners ask most.
14 questions
As an employer, what insurance must I provide by law?
Local employees must be registered for EPF, PERKESO (SOCSO) and the Employment Insurance System (EIS). Foreign workers need PERKESO employment injury cover and the foreign worker hospitalisation and surgical scheme (SPIKPA), among other requirements. Group medical and group life are voluntary benefits.
PERKESO already covers my staff. Do I still need group insurance?
PERKESO mainly covers work injuries, occupational disease and support on invalidity or death. It doesn’t pay private hospital bills for ordinary illness. Group medical and group life fill that gap and help attract and keep staff.
How should group hospitalisation and group term life be put together?
A common approach is tiered cover by grade: group hospital and surgical for admissions, group term life paying the family on death or TPD, then outpatient or critical illness if the budget allows. Set the budget first, then allocate by grade.
Can a company with only 3 to 5 employees buy group insurance?
Many insurers have SME group plans for small teams, though minimum numbers and conditions vary, and small groups may need simple health declarations. Lulu can check suitable options.
What insurance do foreign workers need (SPIKPA and others)?
Foreign workers generally need PERKESO employment injury cover, SPIKPA hospitalisation and surgical insurance, and any insurance or guarantee required in the entry and permit process. Rules are updated, so follow the latest Ministry of Human Resources and Immigration requirements.
If a foreign worker is injured at work, who pays?
For registered foreign workers, PERKESO employment injury cover generally pays medical costs and compensation, and SPIKPA can cover hospital bills. If the employer didn’t register or insure as required, the employer may bear the costs and face penalties.
What is workmen’s compensation insurance and when is it needed?
It covers the employer’s legal liability when employees are injured or die from work. Most employees are now covered by PERKESO, so workmen’s compensation is mainly for workers outside PERKESO’s scope or as extra employer’s liability cover. Whether you need it depends on your workers.
Does group insurance continue after an employee resigns? Can it convert to a personal policy?
Group cover usually ends when the employee leaves. Some group life plans have a conversion option to a personal policy without new underwriting within a set period, depending on the policy terms. It’s why employees should also have personal cover.
Can directors or owners buy insurance through the company and claim tax deductions?
Group insurance premiums the company pays for employees, including employed directors, are generally deductible business expenses, but the treatment and whether it is a taxable benefit depends on tax rules. Confirm with your accountant or tax adviser.
What is keyman insurance? Does a small company need it?
Keyman insurance is life or critical illness cover the company buys on a key person, such as the owner or a top salesperson, with the company as beneficiary. If that person dies or falls ill, the payout keeps the business running, repays loans or funds a replacement. The more a company depends on one or two people, the more it matters.
What is partnership insurance (a buy-sell agreement)?
Partners agree that if one dies or becomes disabled, the others will buy that partner’s shares, with life insurance providing the money. The business doesn’t pass to family members who can’t run it, and the family receives fair value.
If an employee’s group claim is rejected, do I have to handle it?
The company is the policy owner of a group plan, so the company or HR usually helps the employee talk to the insurer, submit documents or appeal. The agent can help follow up. Explaining the cover to employees at the start avoids surprises.
A government or corporate client wants public liability and contractor’s all risk. What are they?
Public liability covers your legal liability for injury or property damage to third parties from your business. Contractor’s All Risk (CAR) covers loss or damage to the works, materials and site during construction, plus related third-party liability. The contract usually states the required limits.
If an employee has an accident in a company car, who is responsible?
The company, as owner, insures the car, and accidents are handled under the policy, but the driver must be authorised under it or an extra excess may apply. Traffic fines for the employee’s offences are generally the employee’s own responsibility. Company cars are best covered for all employee drivers.
More topics
- Getting started 22
- Medical card 29
- Life, critical illness & accident 19
- MLTA / MRTA 13
- Car insurance & roadtax 29
- E-hailing insurance 10
- Lorry & commercial vehicles 11
- Fire insurance 23
- Education fund 9
- Wills 15
- Wealth legacy 12
- MM2H & foreigners 9
- Claims 11
- Managing your policies 10
- Common problems 15
- Lulu’s 13 years: real stories 15
Look after your team
Tell Lulu how many employees you have and your budget, and she’ll check suitable plans.