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As 2026 gets underway, businesses are stepping into a landscape that feels more complex and unpredictable than ever. Rising legal pressures, evolving technology, and a changing climate are reshaping the types of risks organizations must plan for. Having the right insurance strategy in place can help companies stay resilient, even when challenges arrive unexpectedly.
Below are six major risks that businesses should keep on their radar this year.
1. Growing Social Inflation and Expanding Nuclear Verdicts
Large jury verdicts of $10 million or more—often referred to as nuclear verdicts—are becoming increasingly common, particularly in certain regions. These exceptionally high awards are pushing liability insurance premiums upward and making affordable coverage more difficult to secure. The broader trend, known as social inflation, is fueled by a combination of factors such as third-party litigation funding, younger jurors’ distrust of large corporations, and courtroom strategies that emphasize emotional narratives aimed at boosting payout demands.
Industries such as manufacturing, automotive, and healthcare are experiencing the biggest impact. While insurers are experimenting with AI tools to better assess legal exposure and lawmakers in some states are exploring reforms, the issue remains a substantial and unpredictable challenge for 2026.
2. Escalating Cyber Threats and AI-Enabled Attacks
Cyber threats continue to evolve, making them harder to detect and prevent. Attackers are leveraging artificial intelligence and ransomware-as-a-service tools to carry out highly sophisticated intrusions that can steal sensitive data, derail operations, and damage a company’s credibility. These incidents can result in significant financial losses, regulatory fines, and long-term reputational harm.
To reduce exposure, businesses need layered cybersecurity defenses. This includes multi-factor authentication, real-time threat detection tools, regular employee training, and consistent system updates. Cyber insurance remains an essential safeguard, but many carriers require companies to meet specific security standards before offering coverage. Protection today relies on both prevention and compliance.
3. Intensifying Natural Disasters and Climate-Related Damages
Severe storms, wildfires, floods, and other natural disasters are occurring more frequently and with greater force. As losses climb, many insurers are raising premiums, limiting coverage, or withdrawing entirely from high-risk regions. This has made it more challenging for businesses to obtain or keep affordable property insurance.
To stay ahead of increasing climate risk, businesses are investing in more resilient building materials, improved structural designs, and property modernization. Some organizations are also turning to parametric insurance products—policies that pay out automatically when a measurable threshold like wind speed or rainfall is reached. These solutions provide quicker access to recovery funds and help minimize downtime after a disaster.
4. Ongoing Supply Chain Strains and Disruptions
Global supply chains are still experiencing instability driven by geopolitical tensions, material shortages, port congestion, and transportation delays. Even when a company’s own operations remain intact, disruptions affecting key suppliers can ripple through and cause significant interruptions.
To safeguard against these vulnerabilities, many businesses are adopting insurance options that provide financial support when a supplier or transportation channel is impacted. This can include coverage for trade disruptions, supply chain failures, or cyberattacks affecting logistics partners. These policies create a valuable buffer when external events interfere with day-to-day operations.
5. Rapid Regulatory Changes and Complex Compliance Requirements
Regulatory obligations continue to shift quickly—especially in areas related to data privacy, environmental standards, and sustainability disclosures. Businesses that fail to keep up may face legal consequences, added compliance costs, or unexpected policy gaps.
Regulations like the California Consumer Privacy Act (CCPA) are raising expectations for how companies handle personal data, while evolving rules in Europe are broadening consumer rights and increasing legal exposure. Insurance carriers are also navigating a tighter regulatory environment, which influences how they design and issue coverage. For businesses, consistently reviewing policies is essential to ensure there are no hidden exclusions tied to new compliance requirements.
6. Technology-Related Operational Risks
More companies are relying on automation, cloud-based systems, and artificial intelligence to power their operations. While these tools streamline processes and improve efficiency, they also introduce new risks. System outages, software failures, or incorrect decisions generated by AI tools can create costly setbacks or even legal challenges.
To manage these issues, some insurers offer specialized coverage for technology breakdowns, digital disruptions, or operational failures tied to automated systems. Still, organizations must proactively maintain strong security controls, update their systems regularly, and ensure their technology is used responsibly. Strong digital governance paired with the right insurance can significantly reduce exposure.
Preparing for a Challenging 2026
The risks emerging in 2026 are interconnected, meaning a single issue can easily set off a chain reaction. Staying prepared requires consistent policy reviews, strategic risk planning, and a solid understanding of how the threat landscape is evolving. By staying proactive, businesses can better safeguard their operations and position themselves for long-term success.
If you’d like help reviewing your current insurance coverage or identifying potential gaps, we’re here to assist. Give us a call to set up a tailored risk review for your business.