As 2026 gets underway, companies are entering a business environment that feels more unpredictable than ever. Legal challenges are intensifying, cybercriminals are getting smarter, and natural disasters are hitting with greater force and frequency. With so many evolving risks, having the right insurance strategy isn’t just helpful—it’s essential for protecting your business and staying competitive.
Below are six major risks that organizations should keep a close eye on throughout 2026.
1. Escalating Social Inflation and Growing Nuclear Verdicts
Judgments exceeding $10 million—often referred to as nuclear verdicts—are becoming more common, especially in certain regions of the country. This sharp uptick is pushing liability premiums higher and making coverage more difficult for many businesses to secure affordably. The force behind this trend, known as social inflation, stems from a range of factors.
Outside investors are increasingly bankrolling lawsuits, younger jurors tend to approach large corporations with skepticism, and emotionally charged courtroom tactics are swaying decisions toward larger payouts. Companies operating in sectors like healthcare, automotive, and manufacturing are carrying much of the burden.
Although insurers are experimenting with artificial intelligence to predict litigation trends and support claims management, and some states are working on ways to rein in excessive jury awards, social inflation remains one of the most disruptive and costly risks facing businesses this year.
2. Rising Cybersecurity Exposures and AI-Enhanced Attacks
Cyberattacks are becoming more advanced, more automated, and harder to detect. Criminals are leveraging artificial intelligence, ransomware-as-a-service platforms, and sophisticated social engineering schemes to break into systems, steal sensitive data, and cripple operations. Just one successful attack can lead to massive financial losses, regulatory penalties, and long-term reputation damage.
To defend against these threats, businesses must take a proactive, multilayered approach. This includes:
- Using multi-factor authentication across all critical systems
- Implementing technology that can monitor, detect, and respond to suspicious activity
- Training employees regularly on cybersecurity best practices
- Ensuring all software and operating systems stay up to date
Cyber insurance has become a necessity—but carriers typically require companies to meet specific security standards before they’ll approve coverage. Today, strong cybersecurity and insurance protection go hand in hand.
3. Climate Risks and Increased Natural Disaster Losses
Extreme weather events—including hurricanes, floods, wildfires, and severe storms—continue to become more frequent and more destructive. Businesses located in high-risk regions are finding it increasingly challenging to secure property coverage at reasonable prices. In some cases, insurers have pulled out of certain markets altogether.
To adapt, many companies are investing in property upgrades such as reinforced building materials, enhanced fire-suppression systems, and improved storm-resistant design. Others are turning to parametric insurance solutions, which provide payments based on specific, measurable triggers—such as wind speed or rainfall totals—rather than waiting for an adjuster to assess the damage. These solutions can help businesses recover faster and more efficiently.
Given the volatility of modern weather patterns, planning ahead for climate-driven losses is now vital for long-term resilience.
4. Ongoing Supply Chain Challenges and Business Interruption
Global supply chain issues are far from resolved. Congested ports, labor shortages, geopolitical tensions, and resource scarcity continue to disrupt the flow of goods and materials. Even organizations that aren’t directly affected by a disaster or shutdown can still suffer operational interruptions if one of their suppliers faces a significant disruption.
To safeguard their operations, many companies are rethinking their insurance portfolios. Specialized coverages—such as supply chain interruption, logistics disruption, or contingent business interruption insurance—can help protect against losses tied to supplier or transportation failures.
More businesses are also exploring coverage that accounts for cyber-related interruptions within supply networks, recognizing that a breach affecting a logistics partner can easily ripple into their own operations.
5. Increasing Regulatory Demands and Legal Complexity
Regulations continue to evolve rapidly, especially in areas related to privacy, environmental protection, and sustainability disclosures. Laws such as the California Consumer Privacy Act (CCPA) are pushing companies to elevate their data-handling practices or face steep consequences. Meanwhile, several European regulations have made it easier for consumers to file lawsuits over data misuse or other grievances.
Insurance carriers themselves are also facing new regulatory pressures, which may influence the types of policies they offer or modify exclusions and coverage limits. For business owners, this creates a strong incentive to review policies regularly to ensure that new rules don’t leave gaps in protection.
6. Technology-Driven Operational Failures
With companies increasingly relying on artificial intelligence, automation, and cloud-based systems, operational risk has shifted in new directions. While these technologies can streamline workflows and improve efficiency, they also introduce vulnerabilities. A system glitch, a misconfigured AI tool, or a software outage can lead to service interruptions—or worse, compliance failures or legal disputes.
Some insurers now offer policies specifically designed to address tech-related breakdowns or system outages. Still, businesses must stay proactive by keeping systems updated, following responsible AI practices, and maintaining strong digital governance. The combination of technology oversight and proper insurance creates a stronger safety net against unexpected disruptions.
Prepare Your Business for a Complex Risk Landscape
The risks businesses face in 2026 are increasingly interconnected—one challenge can quickly trigger another. That’s why it’s more important than ever to stay informed, review coverage regularly, and adjust risk management strategies as conditions change.
If you’d like help assessing your policies or understanding where you might have potential exposure, we’re here to help. Give us a call to schedule a personalized risk review tailored to your business and industry.