PGI Liability Insurance — Questions and Answers
Question 1: What is 'public liability' insurance commonly needed by businesses in Singapore?
- Insurance for public relations
- Insurance covering a business's legal liability for bodily injury or property damage to third parties caused by the business's operations or premises (Correct answer)
- Insurance for government buildings
- Insurance for publicity events
Correct answer: Insurance covering a business's legal liability for bodily injury or property damage to third parties caused by the business's operations or premises
Public liability insurance protects businesses against claims from third parties (customers, visitors, passersby) who suffer injury or property damage due to the business's activities or premises.
Question 2: What is Work Injury Compensation Act (WICA) insurance in Singapore?
- Voluntary employee wellness programme
- Compulsory insurance for employers covering employees against work-related injuries and occupational diseases regardless of fault (Correct answer)
- Insurance for freelancers only
- Health insurance for retirees
Correct answer: Compulsory insurance for employers covering employees against work-related injuries and occupational diseases regardless of fault
Under WICA, employers must insure all manual workers and non-manual workers earning up to SGD 2,600/month. WICA provides compensation for work injuries and occupational diseases without needing to prove employer fault.
Question 3: What is 'professional indemnity' (PI) insurance and who needs it in Singapore?
- Insurance for professional athletes
- Insurance for professionals (lawyers, doctors, accountants, architects) protecting against claims of negligence or errors in their professional services (Correct answer)
- Insurance for job loss
- Insurance for professional equipment
Correct answer: Insurance for professionals (lawyers, doctors, accountants, architects) protecting against claims of negligence or errors in their professional services
PI insurance covers professionals against claims that their advice, services, or designs caused financial loss to clients. In Singapore, some professions (lawyers, architects) are required to have PI coverage.
Question 4: What is 'product liability' insurance and why is it important in Singapore?
- Insurance for product marketing
- Insurance covering manufacturers, distributors, and retailers against claims that their products caused injury or damage to consumers (Correct answer)
- Insurance for product warranties
- Insurance for product recalls only
Correct answer: Insurance covering manufacturers, distributors, and retailers against claims that their products caused injury or damage to consumers
Product liability insurance covers claims arising from defective products that cause injury or property damage. As Singapore is a major manufacturing and distribution hub, this coverage is vital for businesses in the supply chain.
Question 5: What is 'directors and officers' (D&O) liability insurance?
- Insurance for company directors' personal vehicles
- Insurance protecting company directors and officers against personal liability for decisions made in their corporate capacity that result in legal action (Correct answer)
- Insurance for office equipment
- Insurance for director salaries
Correct answer: Insurance protecting company directors and officers against personal liability for decisions made in their corporate capacity that result in legal action
D&O insurance protects individual directors and officers from personal financial loss when they are sued for alleged wrongful acts in managing the company, covering legal defence costs and settlements.
Question 6: What is 'employer's liability' beyond WICA in Singapore?
- The same as WICA
- Additional insurance covering the employer against common law claims from employees for work-related injuries where negligence is proven, beyond WICA statutory limits (Correct answer)
- Insurance for hiring processes
- Insurance for salary disputes
Correct answer: Additional insurance covering the employer against common law claims from employees for work-related injuries where negligence is proven, beyond WICA statutory limits
While WICA provides statutory no-fault compensation, employees can also sue under common law for negligence. Employer's liability insurance covers damages awarded in such lawsuits, which can exceed WICA amounts.
PGI Liability Insurance
What is 'public liability' insurance commonly needed by businesses in Singapore?