As 2026 gets underway, businesses are entering a landscape filled with emerging challenges and fast‑moving risks. From courtroom trends to advanced cyberattacks, the threats organizations face are evolving quickly. Staying protected requires looking ahead, staying informed, and ensuring insurance coverage keeps pace with the changing environment.
Below are six major risks companies should keep on their radar this year.
1. Social Inflation and the Growth of Nuclear Verdicts
In recent years, jury awards topping $10 million—often called nuclear verdicts—have become more common, especially in certain states. These massive payouts are pushing up liability insurance premiums and making it harder for businesses to secure cost‑effective coverage. This pattern is part of a broader trend known as social inflation.
Several forces are fueling this rise, including third‑party investors backing lawsuits, younger jurors having less trust in large corporations, and emotional courtroom strategies that can influence higher settlements. Industries such as manufacturing, auto services, and healthcare are feeling the impact most strongly.
To counteract this shift, some insurers are turning to artificial intelligence to help assess and predict legal risks, while lawmakers in certain states are proposing legislation aimed at curbing excessive jury awards. Even with these efforts, social inflation stands out as one of the most unpredictable and costly risks for businesses in 2026.
2. Cybersecurity Challenges and AI‑Enabled Attacks
Cyber threats continue to grow more sophisticated as criminals leverage artificial intelligence and subscription‑based ransomware tools to breach networks, steal sensitive data, and disrupt operations. These attacks can lead to major financial losses, reputational damage, regulatory fines, and costly downtime.
Businesses must adopt strong security practices to defend against these risks. This includes multi‑factor authentication, threat‑monitoring technologies, consistent employee training, and keeping software and systems fully updated. Cyber insurance remains an essential safeguard, but most policies now require companies to meet specific security standards before coverage applies.
In today’s environment, prevention and cyber insurance work hand in hand—strong defenses are no longer optional.
3. Climate‑Driven Losses and Increasing Natural Disasters
Hurricanes, wildfires, floods, and other natural disasters are occurring more frequently and with greater intensity. These patterns have made it increasingly difficult for businesses in disaster‑prone regions to maintain affordable property insurance. In some cases, insurers are choosing to withdraw from high‑risk areas altogether.
To reduce exposure, many businesses are making upgrades to their buildings using more durable materials and designs that can better withstand extreme weather. Others are turning to innovative insurance types—such as parametric coverage—which provides payouts when measurable conditions like rainfall totals or wind speeds reach predetermined thresholds. This helps speed up recovery and minimize delays associated with traditional claims.
Preparing for severe weather is no longer just a precaution—it’s essential for long‑term business continuity.
4. Supply Chain Vulnerabilities and Business Interruption
Global supply chains remain fragile, and disruptions continue to affect companies of all sizes. Material shortages, port slowdowns, geopolitical tensions, and transportation challenges can all trigger delays that ripple through entire industries. Even businesses not directly impacted by damage or loss can experience interruptions when key suppliers run into trouble.
More organizations are turning to specialized insurance solutions to protect against these uncertainties. Options may include coverage for supply chain interruptions, trade delays, and cyber incidents affecting logistics partners. These policies can help bridge financial gaps and keep operations moving when outside forces cause unexpected setbacks.
With global unpredictability still a concern, supply chain resilience is a top priority for 2026.
5. Regulatory Shifts and Legal Complexity
Regulatory landscapes around data privacy, sustainability, and environmental practices continue to evolve quickly. Businesses that fail to stay aware of new rules can face compliance challenges, financial penalties, and litigation risks.
Regulations like the California Consumer Privacy Act (CCPA) require companies to treat personal data with greater care. In Europe, new laws are giving consumers more power to bring legal action over data misuse. Insurance carriers are also facing more oversight, which can impact how they design and offer coverage to clients.
Because of these developments, businesses should regularly review their policies to ensure they are fully covered—and to identify any gaps or exclusions related to emerging regulations.
6. Technology‑Related Operational Risks
As companies adopt artificial intelligence, automation, and cloud‑based tools, technology‑driven risks are becoming more common. System outages, incorrect algorithmic decisions, and software failures can lead to costly downtime, customer issues, or even regulatory concerns.
Some insurers now provide coverage specifically designed for technology‑related disruptions or system failures. Still, businesses must take responsibility for maintaining secure and reliable tech environments. Regular updates, responsible use of automation and AI, and strong digital governance practices are essential to minimize exposure.
Balancing innovation with risk awareness helps ensure that digital tools support operations rather than hinder them.
Preparing for the Year Ahead
The challenges businesses face in 2026 are highly interconnected, meaning one issue can trigger another. That’s why proactive planning, ongoing policy reviews, and updated risk management strategies are crucial for staying protected.
If your organization needs support reviewing its insurance coverage or identifying potential gaps, our team is here to help. Give us a call to set up a tailored risk review designed specifically for your industry and business needs.