Cyber Insurance in Singapore: Common Myths Debunked

In today’s digital-first economy, businesses in Singapore rely heavily on technology to operate efficiently. However, this increased dependence on digital systems also exposes companies to cyber threats, such as data breaches, ransomware attacks and phishing scams. This is where cyber insurance became essential to SMEs and other businesses.

According to Cyber Security Agency of Singapore (CSA), there’s a notable rise in local threats, where ransomware and infected infrastructure is the main concern locally. Many SMEs in Singapore mistakenly believe that cyberattacks only target large corporations. However, small businesses often lack dedicated IT security teams which make them more vulnerable. Cyber Insurance provides critical financial protection to help these companies bounce back after an incident.

What is Cyber Insurance & What Does it Cover?

Cyber insurance is a specialized type of business insurance that protects companies from financial losses caused by cyber incidents. It helps cover expenses related to data recovery, legal fees, customer notifications and even reputational damage following a cyberattack.

Common Myths in Cyber Insurance

Myth 1: “My Business is Too Small to be Targeted”

Cybercriminals often target small and medium-sized enterprises (SMEs) because they tend to have weaker cybersecurity measures. According to the Cyber Security Agency of Singapore (CSA), SMEs make up a significant percentage of local cyberattack victims. Hackers know that smaller companies may lack the resources to invest in robust digital protection which makes them easier targets.

Why cyber insurance matters for SMEs:

A single ransomware attack or phishing scam can disrupt operations for days and drain financial resources. Cyber insurance helps cover:

Data restoration
Emergency IT support
Forensic investigation
Legal consultation
Loss of revenue during downtime

Myth 2: “Cyber Insurance is Too Expensive”

The cost of cyber insurance is far less than the potential financial loss from a cyberattack. A single data breach can cost tens or even hundreds of thousands of dollars in recovery expenses, legal fees and lost business. In contrast, cyber insurance premiums are typically affordable and can be tailored to fit your company’s size and industry.

If you already have business insurance in Singapore, you can always add cyber insurance for a more comprehensive protection.

Myth 3: “My IT Team or Antivirus Software is Enough”

Cybersecurity tools and IT teams can prevent cybersecurity attacks but there isn’t guaranteed protection still. Even with advanced systems, there will always be a chance of serious breaches due to human error and ransomware. Examples include:

Employees clicking on phishing emails
Misconfigured cloud systems
Outdated software
Weak passwords or stolen credentials

Cyber insurance complements your cybersecurity set up. It helps cover losses, data recovery costs and even public relations expenses if a breach damages your brand’s reputation. It covers areas your IT tools can’t, such as legal liability and crisis management.

Myth 4: “Cyber Insurance Only Covers Large Corporations”

Today’s cyber insurance policies are designed to suit businesses of all sizes, from start-ups to multinational corporations. Insurers in Singapore now offer flexible coverage plans tailored to business size, covering key risks like data breaches, business interruption and cyber extortion,

If you’re a small business owner, you can find a coverage tailored to SMEs as part of your SME insurance strategy.

Myth 5: “Cyber Insurance Covers Everything Related to Cybersecurity.”

Cyber insurance is comprehensive but not unlimited as there will have common exclusions such as:

Pre-existing vulnerabilities
Intentional or criminal acts by employees
Outdated or unsupported software
Failure to follow incident-response procedures

Understanding what is and isn’t covered ensures your expectations are realistic and your security posture remains strong.

Making Cyber Insurance Work for Your Business

Steps to Get Started:

Assess Your Risk Profile: Identify what digital assets you need to protect, including customer data, intellectual property and operational systems.
Determine Coverage Needs & Compare Policies: Work with insurance broker such as eazy, to calculate appropriate coverage limits based on potential exposure and provide you with the best option for your business to compare.
Implement Required Security Measures: Most insurers require basic cybersecurity hygiene, such as multi-factor authentication and regular backups.
Review & Update Annually: As your business grows and cyber threats evolve, reassess your coverage needs each year.

Cyber Insurance + Cybersecurity = Comprehensive Protection

The most effective approach combines robust cybersecurity practices with comprehensive cyber insurance coverage. This dual strategy ensures you're both preventing incidents and prepared to respond when they occur.

Regulatory Landscape in Singapore

Singapore’s regulatory environment makes cyber insurance increasingly important:

Personal Data Protection Act (PDPA): Mandates that organisations safeguard personal data and notify authorities of any data breaches.
Cybersecurity Act: Grants government agencies the authority to investigate and respond to cyber threats affecting Singapore’s critical information infrastructure.
Technology Risk Management (TRM) Guidelines: Risk management principles and best practice standards to guide financial institutions in managing technology risk.

Conclusion

Cyber threats are not a matter of “if” but “when” for businesses in Singapore. The myths surrounding cyber insurance often prevent SMEs from obtaining crucial protection. By understanding what cyber insurance truly covers and recognizing that cyberattacks target businesses of all sizes, you can make informed decisions to protect your company’s future.

If you’re looking for cyber insurance, you can work with insurance broker like eazy to find the best insurance to fit your business’ needs. Alternatively, contact us today for personalised advice tailored to your business’s specific needs and we will be happy to assist you.