Tender insurance requirements in Singapore: what contractors must show

Before tendering

Public-sector tenders are published and awarded through GeBIZ, the government e-procurement portal. Most construction tenders use the PSSCOC. The Construction Works form is in its 8th edition, July 2020. The Design and Build form is in its 7th edition, July 2020. PSSCOC-lite editions of both were issued in March 2025.

Read four parts of the tender documents before pricing:

1. The insurance clauses of the conditions. In the 2020 Construction Works form these are Clauses 27 and 28.
2. The Appendix, which sets the third-party limit per accident and the percentage added for professional fees.
3. The Specifications, which may add insurance requirements or limit the ones in the conditions.
4. The security deposit amount, also in the Appendix.

Then send the documents to the broker. Insurers price CAR and third-party liability from the contract value, the period, the site and the works. A quotation before submission means the tender price includes the real insurance cost. The contractors' all risks page covers the policy itself.

At tender submission

Most tenders ask the contractor to price insurance into the contract sum. They do not usually ask for policies at this stage. Check the tender instructions for any declaration on insurance.

1. Confirm the contractor's existing policies can meet the contract terms. An annual CAR or liability policy may already cover the project if the limits and extensions match.
2. Confirm the work injury compensation policy is current. It must come from an MOM-designated insurer on MOM's compulsory terms, a rule in force since 1 January 2021.
3. Note any requirement above the contractor's current limits. Raising a limit mid-year takes time and costs extra premium.
4. Ask the broker to check the insurer would accept the employer as "Principal" and "Additional Insured" with cross liability. PSSCOC Clause 27.1 requires it.
5. Keep the broker's quotation with the tender working file.

At award

The Letter of Acceptance starts the clock. Under Clause 4.5 of the 2020 Construction Works form, the contractor deposits security within 14 days of the Letter of Acceptance. The Appendix may set a longer period.

The security can be cash. It can also be a guarantee from a participating financial institution under the eGuarantee@Gov programme. With the employer's prior written consent, a bank or MAS-approved insurer can issue it. The form is set out in the Appendix.

Steps at award:

1. Instruct the bond or guarantee immediately. Insurers need financial statements and may ask for collateral.
2. Instruct the broker to bind the project insurances, with start dates no later than site possession.
3. Send the broker the Letter of Acceptance, contract sum and Appendix.
4. Confirm the sum insured for the works equals at least the contract sum plus the professional fees percentage.

Before work starts on site

PSSCOC requires the insurances to be in force before any work starts. The 2020 Construction Works form sets three obligations.

1. Clause 27.1: injury and third-party property damage. Liability cover for injury or death of any person, and for damage to property other than the works. The employer is noted as "Principal" for employer's liability and as "Additional Insured" with cross liability for third-party liability. The contractor also holds the approved policy required under the Work Injury Compensation Act.
2. Clause 27.2: damage without negligence. Joint-names cover for damage to property caused by collapse, subsidence, vibration, removal of support or lowering of ground water.
3. Clause 28.1: insurance of the works. Joint-names cover for the permanent and temporary works and unfixed materials on site. The sum insured is not less than the contract sum plus the professional fees percentage.

Each insurer must be approved by the Superintending Officer. The contractor deposits a copy of each policy before work starts on site. Receipts for the premiums follow within 14 days.

Site vehicles need third-party motor cover under the Motor Vehicles (Third-Party Risks and Compensation) Act 1960. A vehicle without it cannot be lawfully driven on a road.

During the works and the defects period

The works cover runs until 14 days after the date of substantial completion. It then continues through the defects liability period for damage from causes that arose earlier.

1. Declare variations that increase the contract value. The sum insured must keep pace.
2. Extend the policy period if completion is delayed. Cover that ends at the original date leaves the works uninsured.
3. Notify the insurer of any change in method, such as added piling or dewatering.
4. Report incidents promptly, even small ones. Late notice is a common ground for declining claims.
5. Renew annual policies before expiry and send the new certificates to the Superintending Officer.

If the contractor fails to insure, Clauses 27.3 and 28.1(3) let the employer buy the cover and recover the premium. Clause 28.1(4) accepts a general annual policy if the employer's interest is endorsed and certificates are produced on request.

Subcontractors

The main contractor's policies do not automatically protect subcontractors' workers. MOM says main contractors and developers should not buy new project work injury compensation policies. Each subcontractor must insure its own employees.

1. Collect each subcontractor's work injury compensation certificate before it starts work.
2. Check the policy is from an MOM-designated insurer and covers the relevant workers.
3. Failing to insure a required employee carries a fine of up to S$10,000, jail of up to 12 months, or both.
4. Confirm whether the CAR policy names subcontractors as insured parties. Clause 28.1 excludes tools and equipment owned or hired by subcontractors.
5. Require subcontractors to carry their own third-party liability where the subcontract demands it.

Checklist

1. Download the tender documents from GeBIZ and read Clauses 27 and 28, the Appendix and the Specifications.
2. Note the third-party limit, professional fees percentage and security deposit.
3. Send the documents to a broker and obtain an insurance quotation before pricing.
4. Confirm the work injury compensation policy is current and from an MOM-designated insurer.
5. Confirm the insurer accepts "Principal" and "Additional Insured" wording with cross liability.
6. On award, arrange the security deposit or guarantee within 14 days of the Letter of Acceptance.
7. Bind CAR, third-party liability and Clause 27.2 cover to start no later than site possession.
8. Deposit policy copies with the Superintending Officer before any work on site.
9. Deposit premium receipts within 14 days after that.
10. Collect every subcontractor's work injury compensation certificate.
11. Confirm motor third-party cover on every site vehicle.
12. Declare variations and extend cover for any delay in completion.
13. Keep cover in force through the defects liability period.
14. Confirm the broker is registered with MAS in the Financial Institutions Directory.

Frequently asked questions

Which insurances does PSSCOC require the contractor to hold?

Under the 2020 Construction Works form: liability for injury and third-party property damage (Clause 27.1), work injury compensation (Clause 27.1), cover for non-negligent damage to property (Clause 27.2) and insurance of the works (Clause 28.1). The Specifications may add others.

Must the policy name the employer as joint insured?

For the works and Clause 27.2 cover, yes, in the joint names of the employer and contractor. For liability, the employer is noted as "Principal" for employer's liability and "Additional Insured" with cross liability for third-party liability.

Can a subcontractor rely on the main contractor's CAR policy?

Only for what the policy covers and only if subcontractors are named as insured parties. CAR does not cover a subcontractor's tools, equipment or employees. Each subcontractor still needs its own work injury compensation policy.

When must the policies be produced: tender, award or site possession?

Before any work starts on site. Copies of the policies go to the Superintending Officer before commencement, and premium receipts within 14 days after. The security deposit is due within 14 days of the Letter of Acceptance.

Sources

• BCA: Public Sector Standard Conditions of Contract (PSSCOC)
• BCA: PSSCOC for Construction Works 2020 (PDF)
• GeBIZ
• MOM: Work injury compensation insurance
• Motor Vehicles (Third-Party Risks and Compensation) Act 1960
• MAS: Financial Institutions Directory