Domestic Worker Contract Insurance: Costs, Coverage & Rights

Domestic worker contract insurance helps protect the rights of both employers and domestic workers in specific circumstances covered by the policy, such as a worker’s absence or death, or certain cases of disability, subject to the approved coverage terms. Insurance is mandatory during the first two years for newly recruited domestic workers covered by the regulations, after which it becomes optional.

To benefit from domestic worker insurance, it is important to understand the circumstances covered by the policy, its cost, how to obtain it through the Musaned platform, and the procedures for filing a compensation claim or requesting a premium refund when the policy is canceled. Understanding these details helps you make an informed decision before signing a contract with a recruitment company.

What Is Domestic Worker Contract Insurance in Saudi Arabia?

Domestic worker contract insurance is an insurance policy designed to protect the rights of employers and domestic workers throughout the employment period by covering a range of risks, subject to the terms, exclusions, and compensation limits specified in the policy.

The Ministry of Human Resources and Social Development introduced this service through the Musaned platform as part of the recruitment contracting procedures for newly recruited domestic workers covered by mandatory insurance. Both parties benefit from this arrangement: it provides employers with financial protection in specific circumstances and safeguards domestic workers’ insurance rights in the situations stipulated in the policy.

What Is the Difference Between Contractual Insurance and Health Insurance?

Contractual insurance differs from health insurance in terms of its purpose and the types of risks covered by each policy.

Important: Contractual insurance is not a substitute for health insurance. Saudi Arabia’sCouncil of Health Insurance announced mandatory health insurance from July 1, 2024, for domestic workers registered with an employer when their number exceeds four, subject to the relevant requirements.

Is Domestic Worker Insurance Mandatory?

Yes. Insurance for new domestic worker recruitment contracts covered by the regulations became mandatory for the first two years of the contract, effective February 1, 2024, according to the
Ministry of Human Resources and Social Development. After the two-year period ends, insurance becomes optional for the employer.

It is important to note that the mandatory requirement applies to the category covered by the regulations. It does not necessarily apply to every domestic worker already in Saudi Arabia, regardless of the worker’s recruitment date or contract status. Therefore, review the details of your application and insurance policy through Musaned before making a decision.

Which Cases Are Covered by Mandatory Insurance?

Mandatory insurance applies to new domestic worker recruitment contracts covered by the service through Musaned. Insurance options are presented as part of the contracting procedures after the recruitment company accepts the recruitment request, allowing the employer to review it and select an insurance company and the available coverage according to the approved process.

For domestic workers who are already in Saudi Arabia, optional insurance may be available through insurance companies, subject to the applicable terms and available products.

Insurance Duration and the Possibility of Renewal After Two Years

The policy covers the insurance period specified in its terms. Insurance is mandatory during the first two years for the covered category. Once this period ends, the employer may choose to continue the insurance upon renewal, subject to the applicable conditions.

The end of the two-year period does not mean that the policy renews automatically or that coverage continues without any action. Therefore, check the policy’s expiration date and renewal conditions with the insurance company, and keep a copy of the active policy for future reference.

What Does Domestic Worker Insurance Cover?

Coverage varies according to the circumstances, the beneficiary, and the policy terms. The Ministry of Human Resources and Social Development has explained that insurance provides benefits to both employers and domestic workers. The following table outlines the main announced coverage categories. However, the approved policy must be consulted to determine the applicable coverage limits and eligibility requirements.

Compensation Available to Employers

Insurance helps employers limit financial losses in certain situations that affect the fulfillment of a domestic worker’s employment contract. In the event of 

a domestic worker absconding, documented through the approved procedures, the employer may file a claim with the insurance company for compensation for recruitment expenses, provided that the incident is covered by the policy and the claim requirements are met.

However, the occurrence of the incident alone does not guarantee that compensation will be paid. The incident must be substantiated, the required documents must be submitted, and the policy conditions must be satisfied. The compensation amount also varies according to the coverage limits, the remaining duration of the contract, and the nature of the claim, in accordance with the applicable provisions.

Domestic Workers’ Rights and Insurance Coverage

Insurance protection is not limited to employers; it also covers domestic workers. The main circumstances identified by the Ministry include compensation for permanent total or permanent partial disability resulting from an accident, as well as cases in which salaries and financial entitlements remain unpaid because the employer has died or suffered permanent total or partial disability.

These benefits protect workers’ rights in the specified circumstances. However, they do not exempt employers from their other statutory and contractual obligations, such as paying wages and honoring the rights set out in the employment contract.

Circumstances Excluded from Insurance Coverage

An insurance policy does not cover every event without exception. The policy specifies the covered circumstances, exclusions, and conditions for accepting a claim. Eligibility may depend on the nature of the incident, the documents submitted, and whether the coverage conditions apply.

Therefore, read the exclusions section before accepting the policy, and ask the insurance company about any unclear provision. Do not rely on a brief description of the coverage as a substitute for the official terms and conditions.

How Much Does Domestic Worker Contract Insurance Cost, and Who Pays for It?

There is no single fixed price that applies to all domestic worker employment contract insurance policies. The actual cost is determined when selecting the insurance company and the product available through Musaned, based on the contract details and the coverage offered.

To calculate the overall budget, see our guide to
domestic worker recruitment costs, distinguishing recruitment service fees, visa fees, and the insurance premium. For categories covered by mandatory insurance, the employer pays the insurance cost as part of the recruitment contracting costs; review how the premium is itemized in the agreement and payment breakdown.

Before finalizing the contract, check the following:

• The insurance premium quoted by the insurance company.

• The policy duration and its start and expiration dates.

• The coverage, compensation limits, and exclusions.

• The cancellation and premium refund conditions.

• Any other fees specified in the contract or recruitment procedures.

Reviewing these details helps you understand the total cost and avoid relying on outdated prices or amounts that do not apply to your policy. For example, the listed price of Filipino domestic worker recruitment should be distinguished from the separate insurance premium shown during the contracting process.

How to Obtain Domestic Worker Insurance Through Musaned

Contractual insurance is arranged during the domestic worker recruitment process through Musaned, after you choose a worker and the recruitment company accepts your request. If this is your first application, see our guide on how to recruit domestic workers through Musaned.

Steps to Obtain an Insurance Policy

1. Log in to your account on the Musaned platform.

2. Start a domestic worker recruitment request and specify the occupation, nationality, and required details.

3. Browse available domestic worker CVs and choose a candidate who meets your family’s needs.

4. After the recruitment company accepts your request, review the contractual insurance options presented.

5. Proceed to the page of the available insurance company and select the appropriate policy and coverage from the options displayed.

6. Review the terms, cost, and coverage limits, then complete the policy purchase.

7. Return to Musaned to review the recruitment contract and verify that the information is correct.

8. Approve the contract, pay the required fees through the platform, and confirm the request to complete the recruitment procedures.

When Does Insurance Coverage Begin?

According to the service guide published by the Ministry of Human Resources and Social Development, the insurance policy is activated automatically upon the domestic worker’s arrival in Saudi Arabia. However, the start date of individual benefits may differ according to the coverage and whether a probationary period applies. The standard policy wording distinguishes between benefits that begin upon entry and certain benefits that begin after probation in applicable contracts. Check the effective date of each benefit and keep a copy of the issued policy.

Do not assume that simply selecting an insurance company or starting the recruitment process means that coverage is already active. The issued policy and its terms are the authoritative references.

How Can You Get a Refund of the Domestic Worker Insurance Premium?

The refund of the domestic worker insurance premium depends on the reason for cancelling the policy, whether the insurance is mandatory or optional, and the cancellation and refund terms set out in the policy.

When cancellation is related to the termination of the employment relationship, review the terms and procedures for 

terminating a domestic worker’s employment contract, while distinguishing between termination of the employment contract and cancellation of the insurance policy.

Therefore, a full refund of the premium should not be assumed in every case, nor should a fixed percentage or amount be specified without reviewing the policy terms and consulting the issuing insurance company.

When Can an Insurance Policy Be Canceled and Its Premium Refunded?

The standard wording of the insurance policy for domestic worker contracts identifies circumstances related to the cancellation of mandatory insurance. These include canceling the recruitment contract before the worker enters Saudi Arabia, issuing a final exit visa for the worker, transferring the worker’s services to another employer before completing two years from entering Saudi Arabia (provided another valid policy covers the worker’s contract), or the insured parties obtaining another policy.

When insurance is optional, the standard policy wording permits cancellation in accordance with its provisions. Eligibility for a premium refund and the amount payable remain subject to the policy terms and the procedure applicable to the particular circumstances. The standard wording provides for a calculation based on the unused coverage period after the applicable administrative fee, while previous claims may affect the amount refundable.

Steps to Request a Refund and Determine the Amount Payable

To request a premium refund, follow these steps:

1. Review the cancellation and refund conditions in your insurance policy.

2. Identify the reason for cancellation and check whether it falls within the permitted circumstances.

3. Contact the insurance company that issued the policy through its official channels, or use the procedure specified on Musaned when available.

4. Provide the policy number, employer details, and documents proving the reason for cancellation.

5. Request a written explanation of the refundable amount, how it is calculated, and how long the request is expected to take.

6. Keep the request reference number and all correspondence until the process is complete.

Practical Example: If a domestic worker’s services are transferred to another employer before the worker completes two years in Saudi Arabia, you should verify the requirement for another valid insurance policy. Then contact the insurance company to learn how to cancel the previous policy and determine the amount eligible for a refund under its terms.

How Do You File a Compensation Claim Under Domestic Worker Insurance?

When an event occurs that you believe is covered by the policy, start by contacting the insurance company that issued it. Claim requirements vary according to the reason for the claim and the beneficiary. Therefore, obtain the list of required documents and the procedures applicable to your case before submitting the request.

Documents Required to Submit a Claim

Depending on the type of claim and the insurance company’s requirements, you may need some of the following documents:

• A copy of the insurance policy and its number.

• The domestic worker employment contract and the worker’s details.

• Proof of identity for the claimant and the information required to contact them.

• An official document establishing the incident that forms the basis of the claim.

• Financial documents detailing the expenses or entitlements for which compensation is being requested.

• Any additional reports, decisions, or documents requested by the insurance company, depending on the circumstances.

This is an indicative list, not a standardized list for every claim. The insurance company determines the final requirements according to the policy and the incident involved.

Steps for Submitting and Following Up on a Claim

1. Notify the insurance company of the incident through its approved communication channel.

2. Request the claim form and the list of required documents.

3. Complete the information and attach the supporting documents.

4. Keep the claim reference number and the submission date.

5. Follow up on the claim status and respond to requests for additional information.

6. If the claim is rejected or its processing is delayed, request a written explanation of the reasons, then follow the approved complaints procedure of the insurance company and the relevant regulatory authority.

What Is the Difference Between Domestic Worker Insurance and a Recruitment Guarantee?

Although insurance and recruitment guarantees are both related to the domestic worker hiring process, each serves a different purpose.

You should not assume that a recruitment guarantee covers every circumstance included in an insurance policy, or that having an insurance policy eliminates the recruitment office’s obligations. To understand which rights apply, review the terms of each separately. Our guide to
 domestic worker regulations in Saudi Arabia also explains the rights of both parties and the probationary period.

How Does Al Nojoom Al Momayaza Recruitment Company Help Before You Sign?

 Al Nojoom Al Momayaza Recruitment Company in Tabuk helps you explore available recruitment options and review key details before signing, including total cost, expected recruitment time, and contractual terms. You can compare options according to your family’s requirements and budget, including
 domestic worker recruitment from Ethiopia  where suitable.

Before signing, ask how to select an insurance company through Musaned, when each benefit starts, and how claims and refunds work. Al Nojoom Al Momayaza Recruitment Company is not an insurance company. The selected insurer issues the policy through approved procedures and handles insurance claims under its terms.

Frequently Asked Questions

Is the Employer Entitled to Choose the Insurance Company?

The insurance companies and policies available are presented during the recruitment process through Musaned. Employers can review the displayed options and compare coverage, terms, and costs before making their selection.

What Happens if the Insurance Company Rejects a Compensation Claim?

Ask the insurance company to provide the reason for rejection in writing, then review the policy terms and the documents submitted. If you disagree with the decision, you can follow the complaints procedures approved by the insurance company and the relevant regulatory authority.

Does the Insurance Policy Transfer Automatically When a Domestic Worker’s Services Are Transferred?

You should not assume that the policy transfers automatically. Review the insurance terms applicable to the transfer of services and verify the requirements for canceling the previous policy and issuing a new one, including the requirement for alternative valid insurance when applicable.

Does Insurance Cover All Outstanding Salaries and Financial Entitlements Owed to a Domestic Worker?

Not all outstanding entitlements are automatically covered. The policy may cover specific circumstances involving unpaid salaries and financial entitlements resulting from the employer’s death or permanent total or partial disability.

Can Optional Insurance Be Purchased for a Domestic Worker Already in Saudi Arabia?

Optional insurance products may be available for domestic workers already in Saudi Arabia, subject to the insurance companies’ terms and the products offered. Therefore, check eligibility and the required coverage with the insurance company before purchasing a policy.

What Should You Review in an Insurance Policy Before Accepting It?

Review the policy duration, beneficiaries, covered circumstances, exclusions, compensation limits, and the conditions for submitting claims, canceling the policy, and obtaining a premium refund. Make sure you understand your obligations before accepting the policy.

Make Informed Recruitment Decisions by Understanding Your Insurance

Understanding domestic worker contract insurance helps you review your rights, covered risks, exclusions, claims, and refund conditions before signing. To discuss available recruitment services and your family’s needs,
contact Al Nojoom Al Momayaza Recruitment Company before choosing a domestic worker.