In purchasing a maid insurance, we can all notice that there is an optional add-on called “Waiver of Counter Indemnity”. This is an add-on feature with the additional premium payable for most foreign domestic maid insurance plans. The waiver of counter indemnity limits your $5,000 bond liability to $250 or whichever amount stated by the insurance company on the application form if the breach of the bond is not due to your negligence or fault. The Ministry of Manpower (MOM) requires employers of foreign domestic workers to deposit a $5,000 security bond as a guarantee that employers will not break any laws surrounding the Foreign Domestic Worker (FDW) employment. When this Security Bond is activated, the insurer guarantees to pay the government on your behalf first; then the insurer claims back the money from you.
Bond Breaching Events
In most cases, there is 64 frequency of bond breaching events annually between 2000 and 2010 with a recent update to the regulation according to the Ministry of Manpower. Since then, the count of bond breaches has down about 22 in 2011. This means less than 0.01% of bonds are forfeited in a year given.
Here are some of the most frequency of events that can lead to a bond breaching:
When your domestic helper becomes pregnant – This includes pregnancy, childbirth, miscarriage and abortion expenses. The risk is still high enough for insurance companies to refuse coverage for anything related to your domestic worker’s pregnancy. It is highly unlikely you will be responsible for your domestic worker’s medical bills at this point since she will be breaching her work permit. However, you will instead be responsible for repatriation and re-hiring costs as your insurance will only cover these things if your domestic worker cannot continue due to medical conditions besides pregnancy.
When your domestic helper runs away – If your domestic worker runs away, you should report the incident to the police and the Ministry of Manpower immediately. If you cannot find your domestic worker, half of your security bond ($2,500) will be forfeited to help pay for her repatriation and other related costs. Your insurance can only help recover some of the bonds only if you had purchased the optional waiver of counter indemnity benefit. However, your insurer must have evidence that you were not at fault of breaching the bond, as you did not abuse your maid to the point where she ran away.
You will not be liable for your helper’s violations if you can prove that you informed her of the Work Permit conditions she must comply with and reported a violation when you first become aware of it.
In this case, the waiver could help you save at least S$2,250 if you are successful in filing a claim. Therefore, the waiver of counter indemnity add-on is useful mostly only for those who are completely unfamiliar and uncomfortable with their new maids.
Additionally, you will discharge from the security bond liability only if you meet all of the conditions such as; you have canceled the Work Permit, the helper has returned home and you did not breach any of the conditions of the Security Bond.
Insurance Market reviews the various key components offered in a maid insurance policy and scores them accordingly based on the coverage provided by each policy. This point tells you which policy provides the best coverage in relation to the premiums that you are paying.