Work Permit Security Bond and Insurance Requirements for Singapore Employers: What’s Needed by Sector

Every Singapore employer who hires a foreign worker on a Work Permit takes on two financial obligations that are easy to overlook amid the more familiar conversations about quota and levy: the security bond and medical insurance. Both are compulsory. Both must be in place before the worker even lands in Singapore. And both carry real consequences, ranging from a worker being turned away at the checkpoint to the employer losing a S$5,000 bond, if they are handled incorrectly.

Raffles Corporate Services works with a panel of experienced Singapore law firms who offer cost-effective and efficient legal service and advice. This article is general information only and is not legal advice.

Unlike the foreign worker levy, which is a recurring monthly cost, the security bond and medical insurance are conditions precedent to the Work Permit being issued at all. The Ministry of Manpower (MOM) treats them as core planks of the Employment of Foreign Manpower Act (EFMA) framework, and non-compliance is itself an offence, separate from whatever underlying breach the bond or insurance was meant to guard against.

This guide sets out what the security bond and medical insurance actually require, how the rules differ by nationality and sector (particularly for the Construction, Marine Shipyard and Process, or CMP, sectors), and the practical timeline employers and their HR teams need to plan around before a worker’s Work Permit can be issued or renewed.

What the Security Bond Covers and Who Needs One

A security bond is a banker’s or insurer’s guarantee, in a prescribed MOM template, that pledges to pay the government if the employer or the worker breaches the Work Permit conditions or the security bond conditions. It is not insurance for the worker’s benefit; it is a compliance instrument that protects the state against the cost of repatriation, unpaid levies, or other breaches.

Employers must buy a S$5,000 security bond for each non-Malaysian Work Permit holder they employ. Malaysian nationals are exempt from the bond requirement, which is one of the few genuine cost differences between hiring Malaysian and non-Malaysian Work Permit holders. Critically, the cost of the bond cannot be passed on to the worker under any circumstances; it is an employer-borne obligation.

Where to buy the bond

The bond can be purchased from any bank or insurance company that offers the product. MOM requires the bank or insurer to use the correct template and to name the Ministry of Manpower as the beneficiary:

• If buying from a bank, the template is MOM_SB_MW.
• If buying from an insurer, the template is MOM_SB.

Employers should confirm with their bank or insurer which template applies before submitting the purchase request, since using the wrong form can delay the bond being recognised in MOM’s system.

When to Buy the Bond and How It Takes Effect

Timing is where most first-time employers stumble. The bond must be purchased and in effect before the worker arrives in Singapore, not after. If the bond is not yet effective when the worker lands, the immigration officer will not allow entry, and MOM will not backdate the effective date to accommodate the employer. The worker must be sent home immediately at the employer’s cost.

Because the bank or insurer needs up to three working days to notify MOM, employers should not leave the bond purchase to the last minute before a worker’s flight. Building in at least a week of buffer before the planned arrival date is sound practice.

Security Bond Conditions Employers Must Observe

Buying the bond is only half the obligation. Employers also agree, as a condition of the bond, to a set of ongoing undertakings in respect of every Work Permit holder they employ. These include obligations to:

• Pay the worker’s salary promptly and bear the cost of their upkeep, maintenance and medical treatment while in Singapore.
• Give reasonable notice of repatriation and bear the full cost of it, ensuring all outstanding salary is paid before the worker leaves.
• Provide acceptable accommodation.
• Bear the cost of burial, cremation, or return of the body should the worker die while in Singapore.
• Produce the worker to the Controller of Work Passes when required, including where the pass has been cancelled or a visit pass has expired.
• Employ the worker in accordance with the Work Pass Conditions and Regulatory Conditions under the Employment of Foreign Manpower (Work Passes) Regulations 2012.
• Take reasonable steps to ensure compliance, including reporting any known non-compliance to the Controller and informing the worker of the conditions that apply to them.
• Notify the Controller in writing within seven days of the completion, termination or resignation of employment, and repatriate the worker within the period specified.

Extra condition for Construction, Marine Shipyard and Process sectors

Since 1 May 2022, employers in the CMP sectors have an additional security bond condition: they must ensure that Work Permit holders are sent to MOM’s Onboard centre immediately upon arrival, where required, and that the worker completes the onboarding requirements there. This is a sector-specific addition to the standard bond conditions and is easy to miss if an HR team is used to the general (non-CMP) process.

When the Bond Is Discharged, and When It Is Forfeited

The bond is not a one-off cost that disappears once paid; it remains live for as long as the worker is employed. Employers are discharged from bond liability for a given worker only once all of the following are met: the Work Permit has been cancelled, the worker has returned home, and there has been no breach of the bond conditions. Where all three are satisfied, discharge usually follows about one week after the worker has left Singapore, and MOM notifies the employer by post.

Conversely, the bond may be forfeited if the employer or worker breaches the Work Permit or bond conditions, if salary is not paid on time, if the employer fails to repatriate the worker when the pass is expired, revoked or cancelled, if the worker goes missing, or (for CMP sector employers) if the worker was not sent for the Onboard programme. Employers are not automatically liable for a worker’s own violations (for example, matters relating to pregnancy) if they can show they informed the worker of the applicable conditions and reported the violation as soon as they became aware of it. This makes clear, documented onboarding communication a genuine risk-management tool, not just good practice.

Medical Insurance Requirements for Work Permit Holders

Separate from the security bond, employers must buy and maintain medical insurance (MI) for every Work Permit holder, covering inpatient care and day surgery, including for conditions unrelated to work, with an annual claim limit of at least S$60,000 per worker. Where the policy has sub-limits (for example, per admission or per medical condition), each sub-limit must independently meet this minimum. As with the security bond, the cost of MI cannot be passed on to the worker.

Enhanced MI, rolled out in two stages

MOM has progressively enhanced the minimum MI requirements to reduce the risk of employers facing catastrophic medical bills:

• From 1 July 2023 (Stage 1): the annual claim limit rose to at least S$60,000, with a co-payment split of 75% by the insurer and 25% by the employer for claims above S$15,000.
• From 1 July 2025 (Stage 2): standardised allowable exclusion clauses across insurers, age-differentiated premiums split into two bands (50 and below; above 50), and a requirement for insurers to pay hospitals directly once a claim is admissible.

Employers renewing or extending MI policies should confirm with their insurer which stage of requirements applies to the relevant start date, since the two stages phase in on different timelines depending on when a policy was written or renewed.

Co-payment and exemptions

Employers may arrange a co-pay with the Work Permit holder (this does not apply to migrant domestic workers) only where all of the following are met: the co-pay does not exceed 10% of the worker’s fixed monthly salary, the co-payment period does not exceed six months for every two years of employment, and the arrangement is explicitly set out in the employment contract with the worker’s full consent.

An employer does not need to buy separate MI if the Work Permit holder also holds a Dependant’s Pass and already carries an individual MI plan that meets the minimum coverage for Work Permit holders for the full period of the Work Permit’s validity. This is a narrow exemption and should be verified against the actual policy wording before an employer relies on it.

MI details (insurer name, policy number, commencement and expiry dates) must be submitted online via WP Online before a Work Permit is issued or renewed, and kept updated whenever they change.

Security Bond and Insurance Requirements at a Glance

The practical takeaway from this comparison is that the security bond is nationality-based (Malaysians are exempt) while medical insurance is universal across all Work Permit holders regardless of nationality. Employers who assume the two obligations track each other exactly, and skip MI for Malaysian workers on that assumption, are exposed to a compliance gap that MOM audits do pick up.

Common Compliance Pitfalls

• Buying the bond too late. Leaving the purchase until days before the worker’s flight risks the bond not being effective on arrival, which means the worker is refused entry and must be sent home at the employer’s cost.
• Using the wrong bond template. Banks use MOM_SB_MW; insurers use MOM_SB. Quoting the wrong one can delay MOM’s recognition of the bond.
• Letting MI lapse across a renewal. Because MI details must be current in WP Online before a Work Permit can be renewed, a gap in coverage at renewal time can hold up the entire renewal.
• Attempting to recover the bond or MI cost from the worker. Both costs are non-recoverable from the worker as a matter of MOM policy; doing so is itself a breach.
• Assuming Malaysian workers need no bond and no MI. The bond exemption for Malaysians does not extend to medical insurance, which remains compulsory for every Work Permit holder.
• Not documenting worker communications. Employers who cannot show they informed a worker of applicable conditions, and reported violations promptly, lose the limited protection against forfeiture for that worker’s own breaches.

How Raffles Corporate Services Can Help

Security bond and medical insurance compliance sits alongside quota, levy and pass renewal as part of the broader Work Permit employer obligations that MOM actively audits. Through our associated MOM-licensed employment agency, we help Singapore employers plan the bond and MI purchase timeline around actual worker arrival dates, verify sector-specific conditions such as the CMP Onboard centre requirement, and keep MI submissions current through WP Online so renewals are not held up by an administrative gap.

If your business is expanding its foreign workforce, reviewing its levy exposure under the Local Qualifying Salary changes, or simply wants a compliance health check on its existing Work Permit book, our corporate secretarial and employment pass teams work together so the immigration, payroll and statutory pieces are handled as one engagement rather than in silos.

The Editorial Team, Raffles Corporate Services