Mandatory Insurance in the Philippines
Businesses operating in the Philippines must comply with several mandatory insurance requirements. Below is a comprehensive overview of the key insurance obligations for businesses.
| Insurance Type | Who Must Insure | Legal Basis & Authority | Coverage Requirements | Penalties for Non-compliance |
|---|---|---|---|---|
| Social Security System (SSS) Retirement, sickness, disability, death & Employees-Compensation (EC) fund | Every employer with ≥ 1 employee (including foreign hires with AEP) | Republic Act 11199 "Social Security Act of 2018"; SSS + ECC | Employer 9.5% + Employee 4.5% of MSC (2025 rate) — of which 1% is EC | Fine ≤ ₱20k &/or jail ≤ 12 yrs; surcharge 3%/month on arrears |
| PhilHealth National Health Insurance Program | Same employee set as SSS | RA 11223 "Universal Health Care Act" & IRR; PhilHealth | Employer 3% + Employee 3% of basic salary (2025 cap ₱10k) | Liable for back-premiums + interest 3%/mo; PhilHealth can garnish assets |
| Unemployment Insurance Involuntary Separation Benefit (part of SSS) | Enterprises contributing to SSS for employees | RA 11199 Ch. VI; SSS | Automatically funded via SSS 1% EC share | Same as SSS sanctions |
| Compulsory Motor-Vehicle Third-Party Liability (CTPL) | Any firm owning / registering a motor vehicle | Insurance Code (Pres. Decree 612 as amended by RA 10607) + LTO admin orders | Min bodily-injury limit ₱100k/person / ₱200k/accident (2024 IC Circ. 1-2024) | Vehicle cannot secure or renew LTO registration; fine ₱2–10k + impound |
| Accident & Liability Insurance for Tour Operators For DOT-accredited Tour Operators / Travel Agencies | Required for DOT accreditation & renewal | Tourism Act of 2009 (RA 9593) + DOT M.C. 2023-0003 | Personal-accident & liability cover ≥ ₱1m per tourist / per vehicle | Accreditation withheld / cancelled; operating without = fine ≤ ₱500k + closure |
Key Insurance Considerations for Philippines Businesses
Social Security Compliance
All employers must register with SSS within 30 days of starting operations and remit both employer and employee contributions monthly. Foreign workers with Alien Employment Permits must also be covered.
Natural Disaster Coverage
Given the Philippines' exposure to typhoons, earthquakes, and flooding, businesses should consider comprehensive property insurance with specific Acts of Nature coverage.
Industry-Specific Requirements
Certain industries like tourism, construction, and transportation have additional insurance requirements mandated by their respective regulatory bodies.
Insurance Regulators and Compliance Authorities
The national insurance regulator under the Department of Finance that supervises and regulates the insurance industry, including insurance companies, pre-need firms, and HMOs.
Key Information
Oversees Compulsory Third-Party Liability Insurance (CTPL) for vehicles, Passenger Personal Accident Insurance (PPAI) for public transport, and other mandatory insurance programs. The IC accredits insurance providers and issues guidelines for compulsory insurance programs.
The government-run social insurance program for private sector employees that provides retirement, disability, maternity, sickness, and death benefits.
Key Information
All employers must register with SSS and enroll their employees. Employers must also pay into the Employees' Compensation (EC) program – a mandatory work-related injury insurance scheme. Registration can be done via the SSS My.SSS portal or through the Philippine Business Hub.
Administers the National Health Insurance Program, which is mandatory for all employers and employees under the Universal Health Care Act.
Key Information
Businesses must register with PhilHealth and remit health insurance premiums for their workforce. Contributions are shared 50-50 by employer and employee, with the employer responsible for remitting the total premium monthly or quarterly.
The government's national savings and housing finance program that provides housing loans and other financial services to members.
Key Information
Under Republic Act No. 9679, all employers must register their employees with Pag-IBIG. Both employer and employee contribute to the fund (usually 2% of the monthly salary each). Employers can use the Virtual Pag-IBIG for Employers platform for online enrollment and payments.
Enforces labor laws that make certain insurance coverage mandatory for employers, including SSS, PhilHealth, and Pag-IBIG enrollment.
Key Information
DOLE oversees the Employees' Compensation Commission (ECC) which administers the Employees' Compensation Program. The Occupational Safety and Health Law (RA 11058) requires employers to implement safety programs, which often includes insurance coverage for high-risk sectors.
Handles vehicle registration and requires proof of Compulsory Third-Party Liability (CTPL) insurance for every vehicle.
Key Information
Under Philippine law (Section 389 of the Insurance Code and Sec. 377 of RA 4136), no motor vehicle can be registered or its registration renewed without a valid CTPL insurance policy. For public utility vehicles, the LTFRB mandates additional Passenger Personal Accident Insurance (PPAI).
The primary agency for assisting Micro, Small, and Medium Enterprises (MSMEs) and overseeing business registrations for sole proprietorships.
Key Information
DTI guides businesses through mandatory compliance requirements, including SSS, PhilHealth, and Pag-IBIG registration. DTI's Negosyo Centers provide free mentoring and information to entrepreneurs about their insurance obligations.
Sector-Specific Insurance Mandates
Construction firms are often required to carry Contractor's All Risk (CAR) Insurance and Performance Bonds. DOLE's construction safety rules imply that the cost of a Construction Safety and Health Program (which may include premiums for group accident insurance) is an integral part of project costs.
Key Regulators: DOLE, DTI's Philippine Contractors Accreditation Board (PCAB), and Local Government Units
Beyond CTPL, transport businesses face additional requirements. The Maritime Industry Authority (MARINA) requires ship owners to have marine insurance. The Civil Aviation Authority (CAAP) requires aircraft liability insurance. Freight forwarders typically need Cargo Insurance and Freight Forwarder's Liability insurance.
Key Regulators: LTO, LTFRB, MARINA, CAAP
The Department of Tourism (DOT) accredits tourism enterprises and often checks if they have safety measures and insurance for clients. Travel agencies dealing with visas must post a ₱100,000 bond with the Bureau of Immigration. Adventure tourism operators usually must secure liability insurance to cover tourist injuries.
Key Regulators: DOT, Bureau of Immigration, LTFRB, Local Government Units
Pawnshops and money service businesses regulated by the Bangko Sentral ng Pilipinas (BSP) must bond their accountable officers. Cooperatives registered with the Cooperative Development Authority (CDA) must bond their treasurer or any person handling funds.
Key Regulators: BSP, CDA, SEC
Local Government Unit (LGU) Requirements
Local governments can impose additional insurance requirements through ordinances or as part of the business permitting process. Common LGU-level insurance mandates include:
Fire Insurance for Business Permits
Many cities require businesses to present a Fire Insurance policy or a Fire Safety Inspection Certificate (FSIC) as a prerequisite for the annual business permit renewal. Establishments with high fire risk are often explicitly mandated to carry fire insurance.
Public Liability Insurance
Some cities require certain businesses to obtain Public Liability Insurance to protect customers and the public. For example, a city ordinance might require internet cafes, cinemas, or places of amusement to have liability insurance covering injuries to patrons.
Transport Sector Requirements
Tricycles and other local transport services are regulated by cities/municipalities. Many LGUs mandate that operators be part of a group accident insurance program, making proof of insurance a condition for the issuance or renewal of operating franchises.
One-Stop Compliance Portals for SMEs
An online one-stop-shop for business registration that allows new businesses to register and obtain permits and numbers in one streamlined process.
Visit PortalDedicated online platform for employers to manage SSS contributions, report new employees, and monitor compliance.
Visit PortalOne-stop shops established across cities and provinces to help MSMEs with business development and compliance, including insurance requirements.
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