Why are employers required to buy an insurance policy?

One of the requirements of the Work Permit Department is that the employer take out an insurance policy to cover the FDW (though some say "maid")

  • against injury resulting from accidents, accidental death and illnesses that require hospitalisation.

Normally the package covers the cost of repatriating the remains of FDWs in care of untimely death. However, as a rule, it does not cover the cost of repatriation if the death is by suicide.

For a small premium this last mentioned item can be included (less than a few cents per day) it would be advisable to include this when buying an insurance policy for the FDW.

More about insurance for FDW and Employer.

In the past, (in the bad old days) this was not required of the an Employer. And if one had not taken out an insurance policy to protect the maid (FDW, really) against unforseen illnesses that required hospitalisation she (the employer) could just send her home as soon as she found out about it.

But now the employer, having insured the FDW, need not worry about the cost of hospitalisation. The insurance policy even compensates for the loss of salary and reimburses the employer for the foreign worker levy paid while the FDW is hospitalized up to a maximum oF 60 days.

Update
Times they are a-changing. In view of the continuing reduction of government subsidies for medical and hospitalisation charges, employers are advised to consider taking out an enhanced package instead of the standard furnished.

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