Construction insurance for main contractors in Singapore: 8 covers
Which construction covers are compulsory and which are contractual?
Regulators check statutory covers and impose penalties. Employers check contractual covers and apply contract remedies.
| Cover | Required by | Who is protected | If missing |
|---|---|---|---|
| Work injury compensation (WICA) | Work Injury Compensation Act 2019 | Employees; the employer against their claims | Fine up to S$10,000, jail up to 12 months, or both, per offence |
| Motor third party | Motor Vehicles (Third-Party Risks and Compensation) Act | Third parties injured by site vehicles on the road | Offence; vehicle cannot be used |
| Contractors' all risks | Contract (PSSCOC, SIA, REDAS forms) | The works, materials, often the employer | Breach; employer may insure and deduct |
| Public liability | Contract | Third parties injured or whose property is damaged | Breach of contract |
| Performance bond | Contract | Employer, for non-performance | Tender rejected |
| Plant and machinery | Contractor's choice or hire agreement | Owned or hired plant | Uninsured loss |
| Design professional indemnity | Design and build contracts | Contractor, for design errors | Uninsured design liability |
| Delay in start-up | Employer's choice, on the employer's CAR | Employer's lost revenue from late completion | Uninsured financing and rental loss |
In SH Design & Build v Jurong Port [2026] SGHC 159, a PSSCOC bond was 10% of the original contract sum, given as an insurer guarantee instead of cash.
Work injury compensation: the first policy on any site
The Work Injury Compensation Act 2019 requires every employer to insure employees doing manual work, and non-manual employees earning up to the salary threshold. Construction labour is manual, so the requirement covers the whole site workforce.
Compensation limits rose for accidents from 1 November 2025. Death pays between S$91,000 and S$269,000. Permanent incapacity pays between S$116,000 and S$346,000, multiplied by the percentage of incapacity. Medical expenses are capped at S$53,000 or 1 year from the accident, whichever comes first. The policy must meet these limits and the Act's conditions.
The sector's record is improving but remains the worst in Singapore. The fatal and major injury rate for construction fell from 31.0 per 100,000 workers in 2024 to 26.3 in 2025. Construction, manufacturing and transport together still accounted for more than half of fatal and major injuries. Insurers rate each contractor on its own 3 to 5 year claims record against this sector base, so a clean record is priced.
The main contractor's own WICA policy does not cover subcontractors' workers unless the wording is extended. See the next section. The work injury compensation page sets out the submission.
Does the main contractor's WICA policy cover subcontractor workers?
Not by default. In Mohammed Shahid v Lim Keenly Builders [2010] SGHC 142, a subcontractor's worker fell from scaffolding and sued the main contractor as occupier. The main contractor claimed on its work injury policy. The High Court held the indemnity covered liability only to workmen in the insured's own employment. The worker was not its employee, so the policy did not respond. An endorsement that named subcontractors' workmen covered statutory compensation claims only, not common law claims such as occupier's liability.
The case shows three gaps a main contractor must close.
- Statutory WICA claims by subcontractors' workers. The Act allows a worker to claim against the principal. The main contractor's policy needs an extension that names subcontractors' workers for this.
- Common law claims by subcontractors' workers. These fall to the public liability policy, which must not exclude injury to any person on site. Many liability wordings exclude employees of "any contractor", which recreates the gap.
- Subcontractors' own cover. The main contractor should collect each subcontractor's WICA certificate before work starts and diarise its expiry.
The court noted that the gap could be closed by amending the wording. A broker does this at placement, and reads the liability and WICA policies together rather than one at a time.
Contractors' all risks and who buys it
Contractors' all risks (CAR) insures the works under construction, materials on site and temporary works against physical loss or damage. Most forms add a third party liability section. The policy runs from site possession to practical completion, with a maintenance extension for the defects period.
Either party can buy it. Under PSSCOC and most private forms, the contractor insures in the joint names of the employer and contractor. On large or multi-phase developments, the employer often buys a project policy covering all contractors, and the contractor's contract price excludes it. The contract says which applies. If the employer insures, the contractor still needs to check the deductibles it will bear and whether its own plant is excluded.
Four settings decide whether the CAR policy pays in full.
- Sum insured. The full contract value including variations, free-issue materials and professional fees for reinstatement.
- Deductibles. Separate figures for defective workmanship, water damage and testing, often higher than the general deductible.
- Exclusions. Defective design and workmanship are excluded as a cause; the resulting damage may be covered depending on the clause chosen.
- Period. Extensions of time need policy extensions, in writing, before expiry.
The contractors' all risks explainer covers the clauses in detail.
Plant, motor and the fire exposure
Plant and machinery insurance covers excavators, cranes, piling rigs and generators against accidental damage on site. CAR policies usually exclude plant, or cover it only if declared with a schedule. Hire agreements often make the hirer responsible for the machine, so hired plant needs to be declared too.
Site vehicles that use public roads must carry motor third party cover. Lorries, tipper trucks and vans on a fleet policy sit here. Plant that is driven between sites, such as mobile cranes, needs motor cover for the road journey and plant cover for the work.
Fire is a rising loss cause on commercial sites. SCDF attended 471 fires at non-residential premises in 2025, up 13.5% on 2024. Electrical origin accounted for 43.5% of them. Hot works, temporary wiring and stored materials are the usual causes on construction sites. CAR wordings often include a hot works warranty, which makes the policy conditional on a permit system being followed.
Design PI and delay in start-up
A design and build contractor carries design liability. It needs professional indemnity for design work done in-house and for design subconsultants whose own PI may be too small. PI is claims-made, so cover must be in force when the claim arrives, which may be years after completion. The retroactive date should pre-date the first design and build project.
Delay in start-up (DSU) is the employer's cover. It pays the employer's lost rental income or financing costs when an insured CAR loss delays completion. It sits on the employer's project policy because the employer owns the revenue. A contractor is rarely asked to buy it, but a contractor pricing a design and build job with a fixed completion date should know whether the employer has it, because it changes how hard the employer pushes liquidated damages.
The full programme for a main contractor is 8 policies with different periods, different insureds and different triggers. A broker aligns them at tender stage so no gap sits between the WICA policy, the liability policy and the CAR policy when a subcontractor's worker is injured on a site with a fire.
Frequently asked questions
Which construction covers are compulsory and which are contractual?
Work injury compensation and motor third party are required by statute. Contractors' all risks, public liability and the performance bond are required by the construction contract. Plant and machinery, design PI and delay in start-up are chosen by the party that carries the exposure.
Does the main contractor's WICA policy cover subcontractor workers?
Not without an extension. In Mohammed Shahid v Lim Keenly Builders [2010] SGHC 142, the policy covered only workers in the insured's own employment. Statutory claims by subcontractors' workers need a named extension; common law claims fall to the public liability policy.
Who buys CAR on a project, the developer or the contractor?
The contract decides. Under PSSCOC and most private forms the contractor insures in joint names. On large developments the employer often buys a project policy for all contractors. Either way, the contractor should check deductibles and plant exclusions before pricing.
When does a contractor need design PI?
When it takes design responsibility under a design and build contract, or when it novates the employer's consultants. PI is claims-made, so the policy must run after completion and the retroactive date must cover the first project designed.
Sources
- MOM: Workplace Safety and Health Report 2025
- Work Injury Compensation Act 2019
- MOM: Types of work injury compensation
- [Mohammed Shahid v Lim Keenly Builders Pte Ltd [2010] SGHC 142](https://www.elitigation.sg/gd/s/2010_SGHC_142)
- [SH Design & Build Pte Ltd v Jurong Port Pte Ltd [2026] SGHC 159](https://www.elitigation.sg/gd/s/2026_SGHC_159)
- SCDF: Emergency medical services, fire and enforcement statistics 2025/annual-statistics/scdf-annual-statistics-on-ems-fire-enforcement-2025.pdf)
General information only, not advice on any particular policy. Cover depends on the policy wording and the insurer's terms.