What is the MOM security bond?
MOM minimum requirements on foreign domestic maid insurance coverage
The Ministry of Manpower (“MOM”) in Singapore requires you, as the employer of a domestic helper to purchase a basic insurance coverage that consists of:
- Personal Accident: minimum sum assured of at least $60,000
- Medical insurance coverage: at least $15,000
- MOM Security bond: $5,000
What is the MOM security bond?
Do not confuse the MOM Security Bond with the “embassy bond” or the “performance bond”.
As an employer of a non-Malaysian foreign domestic worker, the MOM requires you to place a security bond with a guarantee value of $5,000. This bond. Made between the employer and the Singapore government, serves to ensure that you and your foreign domestic helper comply with the conditions of the work permit.
You will be discharged of the security bond’s liabilities only when your helper’s work permit has been cancelled, the helper has returned home and none of the security bond conditions have been breached.
So will foreign domestic maid insurance cover the full $5,000 cost of the security bond?
One common misconception is that in the event of a breach of any of the security bond conditions, any penalty on the bond will be paid for by the insurer. This is not true.
What the insurer does is to act as a guarantor and undertake as principal debtor to pay the MOM by providing the MOM with a Letter of Guarantee. Should the MOM demand for either a partial amount or the bond in full to be paid up, this undertaking will not exceed a sum of $5,000. As the employer, you will need to subsequently pay back the insurer all claims and expenses the insurer may have incurred under the terms of the Letter of Guarantee.
There are ways to mitigate this amount. NTUC Income’s Foreign Maid Insurance Plan and MSIG Insurance’s Maid Plus Plan both offer an add-on for “waiver of counter indemnity”. For an additional premium, the $5,000 bond liability is limited to only $250 on condition that you as the employer did not cause the breach of the bond.
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