Counter Indemnity: Do You Need It in Your Insurance Coverage of Your Maid

Home Improvement

When acquiring maid insurance, you will see there is an add-on, the ” counter indemnity waiver,” which is optional. The Ministry of Manpower calls for companies of foreign domestic workers to deposit an S$5,000 safety and security bond as a warranty that companies will not break any regulations bordering the FDW’s work. The waiver of the counter indemnity is the add-on that is an optional attribute of housemaid insurance coverage where the insurer assures to bear themselves the loss of this down payment in case of a breach of a contract from S$5,000-250 or even to S$0. The prospect of not going to the danger of losing such a large amount eases the stress employers really feel, as well as lowers the requirement to micromanage domestic employees, lest they are doing something that can cause a breach of the bond. Nevertheless, with altering the Ministry of Manpower laws, bond violations are becoming an increasing number of irregulars, leaving us with the question of whether or not this add-on is actually worth the price.

Frequency of the Bond Breaching Episodes

As per the Ministry of Manpower, 64 bond violations occurred annually between 2004 and 2010. Nevertheless, with current updates to the policies, the MoM no more holds companies accountable for their employee’s activities, including pregnancy, or if she escapes to the MoM or her embassy. Ever since, the variety of bond violations has actually decreased materially to about 22 in 2011, every one of which was partial breaches instead of full ones. This suggests less than 0.01% of bonds are forfeited in a provided year. The only time you go to threat is if you purposefully do something that breaches your work permit agreement, consisting of misuse, insufficient nutrition, as well as assigning hazardous tasks. The table below programs the regularity of events that will bring about a bond breach, consisting of those of which the MoM has actually stopped holding the employer liable for:

Bond-breaching events                                  Annual Occurrences

Residential Maid Pregnancy:              100

Residential Maid Runaways:              4,000

Misuse of Residential Maid:              1,334

Accidents  Like Life-Threatening:       6

The anticipated value of the waiver of counter indemnity.

The most up-to-date numbers from 2011 show that there is a 0.01% chance of shedding S$2,500 of the protection bond due to a breach. Offered these numbers, an FDW employer’s predicted loss of a bond violation is only S$0.26. This suggests that any kind of employer of an FDW can expect to shed S$0.26 per year due to a bond violation, though the real loss would be much greater if she really breaches the terms of the bond.

When is the waiver worth obtaining?

For the most part, you are going to pay an add-on charge of S$53.50 to get the counter indemnity bond waived off. In contrast to the loss of S$0.26 from a bond violation, this rate of over S$50 is astronomically high. This means that many insurance providers are greatly overcharging for the waiver of an add-on counter indemnity. If you have a good performance history of working with residential workers and you do not face lawful difficulties from your end, the waiver of counter indemnity is for assurance as opposed to for usefulness, though there are insurance providers like HL ASSURANCE SINGAPORE that immediately offer waiver without additional cost.

The Ministry of Manpower has actually substantially decreased the sorts of actions that will cause a full bond violation, making it more difficult to surrender. Not just are you no longer accountable for your domestic employee’s activities, but there are now loosened up policies bordering domestic employee runaways. The bond-breach cases that the counter indemnity waiver might shield you against if your residential worker escapes or if she has a deadly job mishap, with no mistake of yours. In this situation, the waiver might help you conserve at the very least S$2,250 if you achieve success in suing. Therefore, the counter indemnity waiver add-on is useful primarily just for those who are completely strange as well as awkward with their new housemaids.

On the flip side, the only means to truly breach the protection bond is if you actively did something that you understood was illegal, such as misuse, withholding pay, or not offering adequate accommodations as well as privacy, in which situation, the waiver of counter indemnity will be worthless. If you find that you are fairly close to your housemaid already, you might save at least S$50 each year by choosing a great insurance policy that enables you to abandon the waiver for a decreased price.

So, keeping these things in mind, you should choose an excellent insurance company, such as HL Assurance Singapore, and save a lot of money in situations where you can save, as well as your their insurance policies, are transparent. To view plans as well as terms and conditions, you can visit the company website.