The Answer in 60 Seconds

Section 25 of the Work Injury Compensation Act 2019 makes it an offence for an employer to fail to insure or to fail to maintain the WICA insurance required by Section 24. The penalty under Section 25(2) is a fine not exceeding S$10,000, imprisonment not exceeding 12 months, or both. Where the offence is committed by a body corporate, directors, managers, secretaries, and similar officers can be personally liable under Section 25(3) if the offence was committed with their consent, connivance, or attributable to their neglect. The Section 25 offence is independent of the employer's underlying liability to pay compensation under WICA — which continues regardless of whether the policy is in place. Verify all dates and figures against the current statute on Singapore Statutes Online.

The Sourced Detail

The Section 25 offence sits at the heart of Singapore's mandatory employer insurance regime. Many SME founders do not realise that failing to maintain WICA insurance is a criminal offence — not just a regulatory issue — with personal liability extending to directors. Understanding the structure is essential.

Section 24 — the duty to insure

Per Section 24(1) of the WICA 2019:

"It is the duty of every employer to insure, and maintain insurance, under approved policies of insurance with insurers authorised under section 30, against all liabilities which the employer may incur under this Act in respect of any employee employed by the employer."

This duty is owed continuously throughout the period of employment. The employer must:

  1. Insure — obtain a policy at the start of employment
  2. Maintain insurance — keep the policy in force without lapse
  3. Use approved policies — policies with the standard MOM-mandated wording
  4. Use designated insurers — only the 24 insurers on the MOM Designated Insurer list dated 1 January 2026 (or 6 insurers on the platform operator list dated 26 December 2024)

Section 25 — the offence

Per Section 25(1):

"An employer who fails to comply with section 24 commits an offence."

Per Section 25(2):

"An employer who is convicted of an offence under subsection (1) is liable to a fine not exceeding $10,000 or to imprisonment for a term not exceeding 12 months or to both."

The threshold for the offence is the failure itself. There is no need for an injury to have occurred. An employer running uninsured for any period of time has committed the offence on each day the gap exists. Practical enforcement typically focuses on cases discovered through:

  • WICA claims where MOM finds no policy in force at date of accident
  • WSH inspections that include policy verification
  • Complaints from injured workers or their families
  • Cross-checks against MOM's designated-insurer policy database

Section 25(3) — directors' personal liability

This is the provision SME founders most frequently overlook. Per Section 25(3):

"Where an offence under this section by a body corporate is proved to have been committed with the consent or connivance of, or to be attributable to any neglect on the part of, any director, manager, secretary or other similar officer of the body corporate, or any person who was purporting to act in any such capacity, that director, manager, secretary or other similar officer or person, as well as the body corporate, is guilty of that offence and is liable to be proceeded against and punished accordingly."

In plain terms: if the company is convicted of a Section 25 offence, the director (or other officer) can also be personally convicted if:

  • The offence was committed with their consent (they knew and approved), or
  • The offence was committed with their connivance (they knew and turned a blind eye), or
  • The offence is attributable to their neglect (they should have known and prevented it)

The "neglect" limb is broad. A director who never asked HR whether the WICA policy was in force may face personal liability — ignorance is not a defence.

A convicted individual director faces the same penalty as the corporate offender: fine up to S$10,000, imprisonment up to 12 months, or both. The criminal record that follows attaches to the individual.

Section 24(3) — when exemption applies

Per Section 24(3), the Minister may exempt specific employers from the insurance requirement in writing. This exemption is rare in practice and is typically only granted to specific government bodies or large enterprises with approved self-insurance arrangements meeting MOM standards. The standard SME cannot self-insure WICA.

What "maintain insurance" means in practice

The duty under Section 24 is continuous. Common scenarios that breach the duty:

  1. Lapse between policies. The old policy expires on 31 December and the new policy starts on 2 January. The company is uninsured on 1 January — a Section 25 offence on that day.

  2. Premium warranty void. The premium is not paid within 60 days (standard Singapore market premium warranty), the policy is void ab initio — meaning treated as if it never existed. Every day during the supposed cover is a Section 25 day.

  3. Material non-disclosure leading to avoidance. The insurer voids the policy from inception due to non-disclosure on the proposal form. Same effect — every day is a Section 25 day.

  4. Hiring a worker before policy endorsement. New hire starts on Monday. Broker sends endorsement instruction on Wednesday. Endorsement issued on Friday. Three days of Section 25 exposure for that worker.

  5. Cancellation without replacement. Mid-term cancellation without immediate replacement is an open Section 25 breach.

  6. Misclassification — workers omitted from policy. Treating a manual worker as an "independent contractor" without verifying the substantive employment relationship may leave a worker uninsured. The substantive test (control, integration, mutuality of obligation) is what MOM applies, not the contractual label.

What happens when an injury occurs in a Section 25 gap

Two consequences apply in parallel:

  1. The Section 25 prosecution proceeds. The criminal offence is independent of injury.

  2. The employer remains personally liable for compensation. Per Section 24, the duty is to insure against the employer's liability. The liability under WICA exists regardless of whether the policy was in place. If the policy is missing, the employer pays out of pocket — full statutory amount, without insurer reimbursement. As of 1 November 2025, that exposure can be up to S$269,000 (death) or S$346,000 (total permanent incapacity) per incident.

The combined exposure is substantial: criminal conviction of the company and the responsible director, plus six-figure compensation paid personally.

How MOM enforces

Enforcement actions historically include:

  • Prosecution before the State Courts
  • Fines imposed on conviction
  • Public announcement of convictions
  • Director personal prosecution where Section 25(3) applies

The volume of prosecutions is not large compared to the number of employers — partly because designated insurer policy data feeds MOM's systems and most lapses are detected and rectified short of prosecution. But when a serious incident occurs and the employer is uninsured, prosecution typically follows.

Common Mistakes / What Goes Wrong

  1. Treating WICA as a "best to have" rather than a statutory duty. It is mandatory. Failure is criminal.
  2. Assuming directors are protected by the corporate veil. Section 25(3) pierces it specifically for this offence.
  3. Letting the policy lapse between renewals. Even one day uninsured is a Section 25 offence.
  4. Misclassifying workers as independent contractors. The substantive test, not the label, determines whether they are employees within WICA scope.
  5. Treating premium warranty as flexible. It is not. Late premium payment can void the policy ab initio.
  6. Forgetting platform workers. Since 1 January 2025 under the Platform Workers Act 2024, platform operators have separate WICA-equivalent obligations under different designated insurers.

What This Means for Your Business

For founders and directors of any Singapore SME with employees, the operational discipline is non-negotiable:

  1. Treat WICA renewal as a calendar-anchored obligation. Set reminders 90, 60, and 30 days before expiry. Confirm the new policy is bound and the schedule received before the old policy expires.

  2. Run the policy and payroll reconciliation monthly. Every employee on the payroll should be within the declared headcount and EAE on the WICA policy. New hires, terminations, role changes, salary increases — all should reflect on the policy via endorsement or annual declaration.

  3. Verify designated insurer status periodically. The MOM list has changed historically; your insurer should remain on it.

  4. For directors specifically — verify, don't trust. Ask HR or finance to produce the current WICA policy schedule on request. Do not rely on "it's handled." Section 25(3) makes "I assumed someone was doing it" an attributable neglect risk.

  5. In M&A transactions, verify target's WICA status as part of due diligence. Buying a company with a Section 25 problem inherits the exposure.

  6. For platform operators specifically — confirm you're on the platform-operator designated list, not the standard employer list. They are different.

The cost of compliance is small (annual premium plus administration). The cost of non-compliance is criminal liability extending to directors plus uninsured statutory exposure. The asymmetry is total.

Questions to Ask Your Adviser

  1. Is my current WICA policy with one of the 24 MOM-designated insurers, and is it in force without gap?
  2. Does my policy schedule reflect every current employee in the in-scope categories (manual + non-manual ≤ S$2,600)?
  3. What is my premium warranty deadline, and has the current period premium been paid on time?
  4. As a director, what process do I have to verify policy status without relying on a single staff member?
  5. If an employee is misclassified as independent contractor and is later determined to be an employee, what's my exposure?

Related Information

Published 4 May 2026. Source verified 4 May 2026. COVA is an introducer under MAS Notice FAA-N02. We do not recommend insurance products. We provide factual information sourced from primary regulators and route you to a licensed IFA who can match a policy to your specific situation.