In South Africa, the business insurance you are legally required to have as an employer is registration with the Compensation Fund under COIDA (if you employ one or more people) and registration with the Unemployment Insurance Fund (UIF) for employees who work more than 24 hours a month. Other commercial cover, such as public liability or business interruption, was not confirmed as compulsory by any official source we checked, so treat it as a decision to make or something a contract, landlord or lender may ask for.
Health cover for staff (business health insurance, business medical insurance or a medical scheme) is optional, but the two products are regulated differently. This page covers the compulsory registrations first, then the health-cover choices. See the Compensation Fund service booklet for the detail.
Eligibility Requirements at a Glance
- COIDA (Compensation Fund): every employer with one or more part-time, casual, temporary or full-time employees must register. Register within seven days after the first employee was employed, and notify changes in your particulars within seven days.
- Who counts as an employee: a working director with a contract of service counts. Sole proprietors, partners and shareholders who only receive dividends are excluded.
- UIF: registration is a legal requirement for employers whose employees work more than 24 hours a month. You can register with the UIF through gov.za.
- Other cover: professional indemnity, public liability, business interruption and similar policies are not shown as compulsory by the sources we checked. Check your contracts, lease, loan agreement and professional body for what they require.
Income and Affordability Requirements
UIF: the contribution is 2% of gross salary, split 1% from the employee and 1% from the employer.
COIDA: the Compensation Fund calculates your assessment as earnings divided by 100, multiplied by the rate for your industry. The rate for your business is set by the Fund, so confirm it with the Compensation Fund; we have not published a rate here.
Business health insurance and medical cover: contributions for the same medical scheme plan vary only by income and number of dependants. Health insurance premiums are risk-rated and can rise with age. No premium figures were verified for this page, so get a written quote from the scheme or insurer (Council for Medical Schemes explains the difference).
Credit and Financial Requirements
Registration is not a credit application. The Compensation Fund does expect you to stay in good standing:
- Submit your Annual Return of Earnings (ROE). The assessment year runs from 1 March to the end of February, and the ROE online system opens on 1 April each year.
- Pay the assessment raised. Late filing attracts a 10% penalty on the final assessment, according to version 23 of the booklet; confirm the current percentage on the Department of Employment and Labour website.
- Report accidents on time. A Letter of Good Standing requires registration, a submitted annual ROE, a paid assessment and timely accident reports.
If you use contractors, the principal must obtain the contractor’s Letter of Good Standing or become liable for the assessment.
For health cover, schemes may impose a general waiting period of up to three months and a condition-specific waiting period of up to 12 months, with exceptions for prescribed minimum benefits. A registered open scheme cannot reject an application. Health insurance can set its own terms, so read the policy wording.
Documents and Verification Required
For Compensation Fund registration you need:
- The Registration of Employer form (W.As.2)
- A copy of your CIPC, trust or NPO registration documents
- A copy of ID
For commercial policies, the insurer will set its own list. Expect to describe your business activity, premises and assets, but ask the insurer or broker for the exact documents. For group health cover, ask the scheme or insurer; for example, the employer submits a company application form and a membership template by email for Momentum Health4Me.
How to Apply and Improve Approval Readiness
- Register with the Compensation Fund using the W.As.2 form and the routes in the Compensation Fund service booklet; online services and ROE online are on the Department of Employment and Labour site (labour.gov.za).
- Register with the UIF through the gov.za service page, using uFiling.
- File your Annual Return of Earnings each year once ROE online opens on 1 April, and pay the assessment.
- Decide whether staff health cover is a medical scheme or a health insurance product, and tell employees in writing which it is.
- For commercial insurance, use an authorised insurer or broker and read the policy wording and exclusions before you sign.
Frequently Asked Questions
What types of insurance are compulsory for a business in South Africa?
For employers, COIDA registration with the Compensation Fund (one or more employees) and UIF registration (employees working more than 24 hours a month). Other commercial cover could not be shown as compulsory from official sources.
Does COIDA cover everything?
No. COIDA registration is an employer obligation to the Compensation Fund; it is not a substitute for commercial property, liability or health cover. Ask the Compensation Fund exactly what it covers and read your policy wording for anything else.
What is business health insurance?
It is cover for staff that is either a registered medical scheme or a health insurance product. A scheme must cover prescribed minimum benefits; health insurance pays fixed or lump-sum amounts on specified events and is not required to. The Council for Medical Schemes sets out the difference.
What are business health insurance plans?
Options include a registered medical scheme or a health insurance product. As one example, Momentum Health4Me is for employer groups of 5 or more employees, each aged 18 or older and earning under R40,000 a month. Confirm current limits with Momentum, as other sources showed a different salary cap.
Is business medical insurance the same as business health insurance?
The terms are used interchangeably in searches, but a medical scheme and a health insurance product are different regulated products. Ask the provider which one you are being offered.
What are the rules for insurance companies?
Medical schemes fall under the Medical Schemes Act (No. 131 of 1998) and health insurance under the Insurance Act (No. 18 of 2017). Ask any insurer or broker to confirm their authorisation before you pay a premium.
Confirm current requirements with the Department of Employment and Labour (Compensation Fund and UIF) and your chosen insurer. See finance and funding requirements and compare loan requirements if you are also planning funding.