WICA insurance for construction workers: project vs annual policy
WICA insurance for construction workers: who must be insured?
The Work Injury Compensation Act 2019 covers any local or foreign employee under a contract of service or apprenticeship. The employer must hold insurance for all employees doing manual work, at any salary, and for non-manual employees earning S$2,600 or less a month, excluding overtime, bonus and allowances. Other employees may be insured at the employer's option, but a valid claim must still be paid.
On a construction site that means:
- Every Work Permit and S Pass worker on the tools.
- Local tradesmen, drivers and storekeepers.
- Site supervisors and safety coordinators earning S$2,600 or less.
- Apprentices and trainees under a contract.
Independent contractors, the self-employed and uniformed personnel fall outside WICA. A sole proprietor subcontractor working alone is not an employee of anyone and is not covered by any WICA policy on site.
The risk is not theoretical. Construction's fatal and major injury rate was 26.3 per 100,000 workers in 2025, down from 31.0 in 2024 but still above the national workplace major injury rate of 15.7 per 100,000.
Annual policy or project policy?
A contractor chooses between 2 structures. Most main contractors hold both: an annual policy for permanent staff, and project policies where the contract or the client requires one.
| Feature | Annual policy | Project policy |
|---|---|---|
| Period | 12 months, renewed | Start to completion of one contract, plus maintenance if agreed |
| Scope | All sites and the yard | One named site and contract |
| Rating basis | Estimated annual earnings across the company | Estimated earnings for the project |
| Adjustment | At year end on actual payroll | At completion on actual payroll |
| Named insured | The contractor | Contractor, often with named subcontractors |
| Expiry risk | Lapse at renewal | Expiry before practical completion |
The project policy fits a joint venture, a client who demands a dedicated certificate, or a contract that runs 30 months and would otherwise straddle 3 annual renewals. Its weakness is the end date. Work that overruns the policy period is uninsured until an extension is bound. The broker diarises the completion date and extends before it, not after.
An annual policy is simpler to administer and does not run out mid-project. Its weakness is declaration: a contractor that wins 2 large contracts in month 4 and doubles its payroll must declare the increase or face a large adjustment premium and a possible under-declaration dispute.
The subcontractor gap
A main contractor's WICA policy covers workers in the main contractor's own employment. It does not automatically respond to a claim by a subcontractor's worker.
The High Court made this clear in Mohammed Shahid v Lim Keenly Builders, [2010] SGHC 142. A worker employed by a post-tensioning subcontractor fell 9 metres when a work platform gave way at a Tuas site. He sued the main contractor as occupier. The main contractor settled at 95% liability and then claimed on its workmen's compensation policy. The court held the policy covered liability to workmen "in the Insured's employment". The injured man was not the main contractor's employee. The policy was a composite policy covering the main contractor and its subcontractors separately, not jointly. The indemnity claim failed.
Two lessons follow. First, each subcontractor needs its own WICA policy for its own workers, and the main contractor should hold a copy of the certificate before the subcontractor steps on site. Second, the main contractor's own exposure to a subcontractor's injured worker is a common-law occupier's liability. That sits in a public liability policy or an employer's liability extension, not in the standard WICA section. The judgment itself noted the gap could be closed by a policy endorsement, and brokers now ask for it.
How premiums are rated
WICA premiums are rated on earnings. The contractor declares the estimated annual earnings for each category of worker, and the insurer applies a rate per S$100 of earnings to each category. At year end or completion, the contractor declares actual earnings and the premium is adjusted.
AIG's published scheme for contractors and renovators shows the shape. Premium equals estimated annual earnings multiplied by the rate for the trade. The general renovation contractor rate is 3.15% of earnings. Lower-risk categories carry lower rates on the same form. "Estimated annual earnings" means not less than the past year's earnings, and under-declaration of workers, job category or earnings gives the insurer grounds to reduce or refuse a claim.
Example only. A fit-out contractor with 40 workers and estimated annual earnings of S$1.2 million, rated at 3.15%, would pay S$37,800 before GST under that scheme. If actual earnings came in at S$1.5 million, the adjustment at year end would add S$9,450. Insurers also set a minimum premium per policy, so a 3-person subcontractor pays the minimum rather than a straight percentage.
Rates vary by insurer, trade, height of work and the contractor's claims record over 3 to 5 years. From 1 January 2021, every WICA policy must be issued by an MOM-designated insurer on MOM's compulsory terms, so the wording is the same across insurers; the rate and the service are what differ. The existing article on how WICA premiums are worked out covers the rating mechanics.
Compensation limits from 1 November 2025
The compensation schedule under WICA increased for accidents on or after 1 November 2025.
| Compensation | Before 1 November 2025 | From 1 November 2025 |
|---|---|---|
| Death, minimum | S$76,000 | S$91,000 |
| Death, maximum | S$225,000 | S$269,000 |
| Permanent incapacity, minimum | S$97,000 x % incapacity | S$116,000 x % incapacity |
| Permanent incapacity, maximum | S$289,000 x % incapacity | S$346,000 x % incapacity |
| Medical expenses, maximum | S$45,000 | S$53,000 |
Medical expenses are paid up to the cap or for one year from the accident, whichever comes first. A policy on MOM's compulsory terms follows the new schedule automatically. Contractors should check that any common-law section, which responds when a worker sues instead of claiming under WICA, carries a limit high enough for a fatal fall at a main-contractor site.
Penalties for not insuring
An employer who fails to hold WICA insurance for an employee who must be insured commits an offence. The penalty is a fine of up to S$10,000, imprisonment of up to 12 months, or both. The employer also remains liable to pay the compensation itself. MOM requires contracts to be finalised and information submitted to the insurer at least 21 days before the policy starts.
The fine applies per offence, so a contractor with 30 uninsured workers faces 30 offences. MOM also checks insurance when a Work Permit is issued or renewed, so an uninsured foreign worker can cost the employer the permit as well as the fine.
For a main contractor, the practical control is a site-entry rule: no subcontractor worker is inducted without a copy of a current WICA certificate naming that subcontractor. The TRS work injury compensation page sets out what a broker checks on each certificate.
Frequently asked questions
Does the main contractor's WICA policy cover subcontractor workers?
Not by default. The policy responds to workers in the insured's own employment. In [2010] SGHC 142 the High Court refused a main contractor's indemnity claim for a subcontractor's worker injured on its site. Each subcontractor needs its own policy, and the main contractor's exposure as occupier belongs in its liability cover.
Can one project policy cover every worker on site?
Yes, if it is written that way. A project policy can name the main contractor and each subcontractor as separate insureds, with earnings declared for each. The premium is then rated on the total site payroll. Any subcontractor appointed after inception must be added by endorsement.
How is the WICA premium calculated for construction?
Estimated annual earnings for each worker category multiplied by the insurer's rate for that trade, subject to a minimum premium. One published contractors' scheme rates general renovation at 3.15% of earnings. The premium is adjusted on actual earnings at year end or project completion.
What if a worker is injured after the project policy expires?
The worker is uninsured for WICA purposes and the employer pays the compensation itself. The employer is also exposed to the fine of up to S$10,000 and up to 12 months' imprisonment. Project policies should be extended before practical completion slips, and the maintenance period should be included at inception.
Sources
- MOM: work injury compensation insurance
- MOM: WICA types of compensation
- MOM: Workplace Safety and Health Report 2025
- [Mohammed Shahid v Lim Keenly Builders Pte Ltd [2010] SGHC 142](https://www.elitigation.sg/gd/s/2010_SGHC_142)
- AIG: contractors and renovators scheme proposal form
General information only, not advice on any particular policy. Cover depends on the policy wording and the insurer's terms.