As 2026 gets underway, businesses are entering another year filled with shifting challenges and rising uncertainties. New technologies, evolving legal pressures, and unpredictable environmental events are changing the way companies think about risk. Having the right insurance strategy—and understanding the issues shaping the coming year—can make a major difference in staying protected and resilient.
Below are six emerging risks that organizations of all sizes should keep on their radar as they plan for the year ahead.
1. Growing Social Inflation and Increasingly Large Jury Awards
In recent years, massive jury verdicts—often reaching $10 million or more—have been becoming more frequent, particularly in certain parts of the country. These extremely high awards, commonly referred to as nuclear verdicts, are fueling major increases in liability insurance costs and making coverage more challenging to secure.
The rise of social inflation is influenced by several factors, including third-party funders supporting lawsuits, younger jurors who tend to view large corporations more critically, and courtroom strategies that encourage bigger payouts. Industries such as healthcare, transportation, and manufacturing are feeling the pressure most intensely.
Some insurers have turned to artificial intelligence to help evaluate legal risk, while lawmakers in several states are examining reforms aimed at curbing excessive jury awards. Even with these developments, social inflation remains a costly and unpredictable challenge heading into 2026.
2. Escalating Cyber Risks and AI-Enhanced Attacks
Cybercriminals are becoming more calculated and technologically advanced. Tools like AI-driven malware and ransomware-as-a-service platforms make it easier than ever for attackers to disrupt systems, steal sensitive data, or damage a company’s public reputation. For businesses, even a single incident can lead to staggering financial consequences—from operational downtime and regulatory fines to expensive recovery efforts.
To address these risks, companies need to strengthen their cybersecurity practices. This includes enabling multi-factor authentication, adopting threat detection and response tools, providing ongoing employee security training, and keeping all systems and software updated. Cyber insurance also plays a crucial role, though most policies now require companies to meet strict cybersecurity standards before qualifying for coverage. In today’s landscape, prevention and insurance must work together.
3. Climate-Driven Losses and Increasingly Severe Natural Disasters
Extreme weather events—from floods and wildfires to hurricanes and severe storms—continue to become more frequent and destructive. These trends are making it more expensive for businesses in high-risk areas to obtain property insurance, and in some regions, insurers are scaling back or withdrawing from the market entirely.
In response, many companies are taking proactive steps, such as reinforcing buildings with durable materials, improving structural designs, and adopting more resilient construction practices. Some are also exploring parametric insurance solutions, which issue payouts based on measurable triggers like rainfall totals or wind speed rather than waiting for damage assessments. This approach helps businesses access recovery funds quickly and efficiently, making it an appealing option for those in disaster-prone areas.
4. Ongoing Supply Chain Vulnerabilities and Operational Disruptions
Global supply chains continue to face instability. Delays at major ports, shortages of critical materials, geopolitical tensions, and conflicts across key regions have all contributed to unpredictable supply timelines. Even if a company doesn’t suffer direct damage, issues affecting suppliers or shipping networks can halt operations unexpectedly.
To manage these exposures, many organizations are exploring insurance policies designed to cover disruptions involving suppliers, transportation routes, or logistics partners. These may include coverage for supply chain breakdowns, infrastructure problems, or even cyber incidents affecting transportation systems. Having the right safeguards in place can prevent a supplier’s setback from becoming a business-wide crisis.
5. Increasing Legal Complexity and Rapidly Changing Regulations
Businesses are under growing pressure to keep up with shifting regulatory requirements—especially in areas like data privacy, environmental standards, and ESG reporting. Falling behind can lead to compliance violations, fines, or legal exposure, creating new challenges for companies in virtually every industry.
Legislation such as the California Consumer Privacy Act (CCPA) and similar laws across the country are requiring stronger data protection practices. In Europe, evolving regulations are providing consumers with even more avenues to pursue legal action. At the same time, the insurance industry itself is facing heightened scrutiny, which may influence how insurers design coverage and exclusions.
For businesses, regularly reviewing insurance policies is essential. Hidden gaps tied to new or evolving regulations can easily be overlooked, leaving organizations vulnerable when issues arise.
6. Operational Risks Created by Advanced Technology
Tools like artificial intelligence, automation platforms, and cloud-based systems are becoming standard across industries. While they offer major benefits in speed, efficiency, and decision-making, they also come with their own set of risks. A malfunctioning algorithm, system outage, or flawed automated process can lead to costly downtime, data errors, or even legal complications.
Some insurers now provide coverage tailored to disruptions caused by technology failures. However, businesses still need strong digital oversight—meaning routine system updates, responsible use of emerging tools, and robust security practices. Balancing innovation with careful management is key to avoiding technology-related losses.
Staying Prepared for 2026
The risks facing businesses in 2026 are more interconnected than ever. A cyberattack can trigger supply chain issues, a legal dispute can impact operations, and extreme weather can influence insurance availability. That’s why planning ahead—through regular policy reviews, updated risk management strategies, and staying informed about emerging threats—is essential for long-term stability.
If you’d like support evaluating your current coverage or identifying potential gaps, we’re here to help. Reach out to schedule a customized risk review tailored to your company’s needs and industry.
