Does my business have to insure its vehicles, and what is the minimum?

The Answer in 60 Seconds Yes, and it is one of only two insurances a Singapore business is required by statute to hold. Section 3(1) of the Motor Vehicles (Third-Party Risks and Compensation) Act 1960 makes it unlawful for any person to use, or to cause or permit any other person to use, a motor vehicle in Singapore unless a policy of insurance in respect of third-party risks that complies with the Act is in force. The Land Transport Authority puts it in one line: every vehicle driven on Singapore roads must have motor insurance coverage at all times, and the insurance must at least cover third-party liability for deaths and bodily injury.

The statutory minimum is narrow. Section 4(1)(b) of the Act requires cover for liability in respect of the death of or bodily injury to any person caused by or arising out of the use of the vehicle. It does not require cover for damage to other people's property, damage to your own vehicle, or theft. Most businesses buy more than the minimum, and most contracts with customers, landlords and financiers ask them to.

The penalty, under section 3(2) and 3(3) of the Act, is a fine of up to $1,000 or imprisonment of up to 3 months or both, and disqualification from holding or obtaining a driving licence for 12 months unless the court finds special reasons. LTA adds the practical consequence: your insurance must cover the entire road tax renewal period before you can renew, so an uninsured vehicle is also an untaxed one within a year.

Work injury compensation cover under the Work Injury Compensation Act 2019 is the other statutory insurance. The two do not overlap, and section 4(4) of the motor Act says so: a motor policy is not required to cover an employee's death or injury arising out of and in the course of employment. That is WICA's territory, including an employee driving your van.

The Sourced Detail

The requirement: section 3 of the Motor Vehicles (Third-Party Risks and Compensation) Act 1960

Section 3(1) of the Act provides that it is not lawful for any person to use, or to cause or permit any other person to use, a motor vehicle in Singapore, or a Singapore-registered vehicle in a territory named in the Schedule, unless there is in force in relation to that use a policy of insurance or a security in respect of third-party risks that complies with the Act. The offence sits on the user and on whoever causes or permits the use. For a business, that is the driver and the company both.

Section 3(2) sets the penalty: a fine not exceeding $1,000 or imprisonment for a term not exceeding 3 months or both. Section 3(3) adds that a person convicted is to be disqualified from holding or obtaining a driving licence under the Road Traffic Act 1961 for 12 months from conviction, or from release if imprisoned, unless the court for special reasons thinks fit to order otherwise, and the court may order a longer period. The Land Transport Authority restates the same three consequences on its motoring portal.

Section 3(4) gives an employee driver a defence: a person is not guilty if they prove the vehicle was not theirs and not in their possession under a hire or loan contract, that they were using it in the course of their employment, and that they neither knew nor had reason to believe there was no policy in force. Read the other way, that defence protects the driver and leaves the employer exposed. The company that put an uninsured vehicle on the road is the person who caused or permitted the use.

Section 3(6) lists the exemptions: Government vehicles, visiting forces, police use, and an owner who has deposited and keeps deposited $125,000 with the Accountant-General. For an ordinary business none of these applies.

What the policy must cover: section 4

Section 4(1) sets two requirements. The policy must be issued by an insurer lawfully carrying on motor insurance business in Singapore, and it must insure the persons or classes of persons specified in it against any liability incurred in respect of the death of or bodily injury to any person caused by or arising out of the use of the vehicle in Singapore and in the Schedule territories. That is the whole of the statutory minimum. Two things follow from its shape.

First, the requirement is about death and bodily injury. Third-party property damage, the dented car in the next lane, is not part of the statutory minimum. The General Insurance Association of Singapore describes motor insurance as covering personal injury you may cause to third parties and, in addition, the cost of damage to someone else's property; the property half is what the market sells in every standard third-party policy, not what section 4 requires.

Second, section 4(4) says the policy is not required to cover the death of or bodily injury to a person in the employment of the insured where it arises out of and in the course of that employment, nor, since 1 January 2025, a platform worker providing a platform service for an insured platform operator, nor any contractual liability. That is not a gap. It is the boundary with the Work Injury Compensation Act 2019, which requires every employer to insure manual workers and non-manual workers earning up to the statutory threshold against work injury. An employee injured while driving the company van on a delivery claims under WICA, not under the motor policy. A pedestrian the van hits claims under the motor policy.

Road tax and the insurance certificate

The Land Transport Authority states that your insurance must cover the entire road tax renewal period before you can renew. In practice the insurer transmits the policy to LTA and the renewal fails if nothing is on file. This is the mechanism that catches most lapses: a business that lets a policy expire discovers it when the road tax renewal is refused, or at the roadside.

The Motor Insurers' Bureau of Singapore

Where an uninsured or untraced driver kills or injures someone, the victim is not left without recourse. The Motor Insurers' Bureau of Singapore describes itself as an independent body set up in 1975 and funded by all motor insurers in Singapore, compensating people injured in road accidents caused by negligent motorists who cannot be traced or who are uninsured, and making compassionate payments to persons injured and to the dependants of persons killed through the use of motor vehicles. The Bureau's claims page sets out what it pays and how a claim is made. For a business the point is simple: an uninsured accident is not written off by the system, it is paid by the Bureau and pursued.

Commercial vehicles are not a separate law, but they are a separate policy

Section 3(1) applies to every motor vehicle used in Singapore and does not distinguish a director's car from a refrigerated lorry. What it requires is a policy in force in relation to the use of the vehicle by that person, and section 4(1)(b) lets the policy specify the persons or classes of persons it insures. A policy is therefore only compliant for the use and the drivers it names. A vehicle registered to the company and used for the business needs a policy that describes that use and those drivers; a policy written for private use by a named individual does not satisfy section 3(1) for a delivery run by an employee.

Fleets

A business with several vehicles can insure each separately or under one policy covering the fleet. The statutory requirement is the same either way: every vehicle, at all times, with a policy that meets section 4(1), and, per LTA, cover for the whole of each vehicle's road tax period before that vehicle's tax can be renewed. One policy with one renewal date is simpler to keep aligned with that rule than several.

What This Means for Your Business

If your business owns, leases or hires a vehicle and it goes on the road, the minimum is set by law and it is the same for every trade: a third-party policy covering death and bodily injury, in force at all times, in a form LTA will accept for road tax.

Beyond the minimum, the question is who else is asking. A vehicle financier or leasing company will require comprehensive cover with itself noted as an interested party, because it owns the asset. A logistics customer's contract will ask for goods-in-transit cover and a stated third-party property damage limit. A landlord whose car park you use may ask for a certificate of insurance. None of these is the law. All of them are conditions of doing business, and they usually add up to more cover than the Act requires.

The trades that most often meet this requirement without noticing are the ones where the vehicle is incidental: a cafe with a delivery scooter, a clinic with a director's car registered to the company, a contractor with a pickup. The scooter is a motor vehicle on a road, and the Act applies to it exactly as it applies to a lorry.

Situation	What the law requires	What is usually also asked for
Director's car registered to the company	Third-party policy, death and bodily injury	Comprehensive, because the company owns the asset
Delivery van or lorry	Third-party policy, on a commercial motor wording	Third-party property damage limit, goods in transit, comprehensive if financed
Delivery scooter or motorcycle	Third-party policy	Rider personal accident, which WICA covers if the rider is an employee
Leased or hire-purchase vehicle	Third-party policy	Comprehensive with the financier as interested party, per the finance agreement
Fleet of several vehicles	Every vehicle insured at all times	One fleet policy, one renewal, one certificate

Common Mistakes

Using a private-car policy for business. The policy is in force, so the road tax renews, but the wording excludes use for hire, reward or the carriage of goods. The accident is uninsured in every sense that matters, and section 3(1)'s requirement of a policy in force in relation to that use is not met.
Letting the policy and the road tax fall out of step. Road tax runs for six or twelve months; the policy renews on its own date. A policy that expires mid-way through a road tax period leaves a legally taxed but uninsured vehicle on the road.
Assuming the employee driver is covered by the motor policy. Section 4(4) says the motor policy need not cover the driver's own injury in the course of employment. That is WICA's. A business without WICA that relies on comprehensive motor cover has two gaps, not one.
Reading the statutory minimum as adequate cover. Section 4(1)(b) requires cover for third-party death and injury. It says nothing about the damage to the other vehicle, or the lorry written off. Those are choices, and the contract with the financier usually makes them for you.
Forgetting the scooter. A delivery scooter registered to the business is a motor vehicle under the Act. It needs its own policy and its own road tax.
Permitting use without checking. Section 3(1) covers the person who causes or permits the use, and section 3(4)'s defence is written for the employee, not the employer. A company that hands the keys to a driver for an uninsured vehicle is liable alongside the driver.

Questions to Ask Your Adviser

Is every vehicle registered to the business insured on a commercial motor wording that covers the use it is actually put to?
What third-party property damage limit does the policy carry, and does it meet what our customers' contracts ask for?
Do the policy renewal dates line up with the road tax renewal dates, or is there a window where one has lapsed?
Which of our vehicles are financed, and is the financier noted on each policy as required by the finance agreement?
Are our drivers covered under WICA for their own injuries, separately from the motor policy?
Does a fleet policy make sense at our vehicle count, and what does it do to the excess per claim?
If a vehicle is off the road for a period, what does the policy and LTA require before it goes back on?

Related Information

Published 26 August 2026. Source verified 26 August 2026.

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Compulsory Motor Insurance in Singapore: What the Law Requires for Every Vehicle Your Business Runs