As 2026 gets underway, companies are navigating a landscape that feels more unpredictable than ever. From legal upheavals to advanced cyber threats, the challenges facing today’s businesses continue to evolve at a rapid pace. Staying informed—and making sure your insurance coverage reflects these shifts—can play a major role in protecting your organization’s future.
Below are six major risks that businesses should keep on their radar this year:
1. Growing Social Inflation and Escalating Jury Awards
Large jury verdicts—often exceeding $10 million—are becoming more common, particularly in certain regions. These “nuclear verdicts” are pushing liability insurance premiums higher and making coverage harder to secure. This surge, known as social inflation, is influenced by several factors: outside financing of lawsuits, younger jurors who tend to be more skeptical of big companies, and emotional litigation tactics that encourage juries to award higher damages.
Industries like healthcare, automotive, and manufacturing are feeling this pressure the most. Some insurers are starting to use artificial intelligence to analyze and anticipate legal risks, and state lawmakers are exploring ways to limit excessive awards. Yet despite these efforts, social inflation remains one of the most challenging and costly issues for businesses in 2026.
2. Advanced Cyber Risks and AI-Driven Attacks
Cybercriminal activity continues to grow more sophisticated. Attackers are leveraging artificial intelligence and ransomware-as-a-service tools to steal sensitive information, disrupt operations, and harm a company’s reputation. Even a single cyber incident can result in substantial financial losses—from downtime to regulatory fines and legal consequences.
To stay ahead of these threats, companies need strong cybersecurity practices. That means enforcing multi-factor authentication, using tools that monitor and respond to suspicious activity, conducting ongoing employee training, and ensuring all software remains updated. Cyber insurance can offer another layer of protection, but most policies now require businesses to meet strict cybersecurity standards. In today’s environment, prevention and insurance must work together.
3. Climate-Related Disasters and Rising Property Losses
Severe weather events—such as hurricanes, floods, and wildfires—are increasing in frequency and intensity. As a result, businesses located in high-risk areas are finding it more difficult to secure property insurance or maintain reasonable premium levels. In some regions, insurers are withdrawing from the market entirely due to ongoing losses.
To reduce exposure, many organizations are upgrading buildings with more resilient materials and designs that can better withstand extreme weather. Others are turning to parametric insurance, which pays out when specific conditions (like wind speed or rainfall totals) are met. This approach bypasses lengthy damage assessments and helps businesses recover more quickly. Preparing for climate-related risks is now essential for long-term operational stability.
4. Supply Chain Vulnerabilities and Operational Interruptions
Global supply chains continue to face disruption, creating challenges for businesses of all sizes. Delays at ports, shortages of key materials, and geopolitical conflicts all contribute to unpredictable slowdowns. Even if a business isn’t directly affected by an incident, problems within its supplier network can bring operations to a halt.
To address these vulnerabilities, many companies are securing insurance designed specifically for supply chain interruptions. These policies may cover losses stemming from supplier outages, trade restrictions, or cyberattacks affecting logistics partners. With the right coverage in place, companies can maintain smoother operations even when external issues arise unexpectedly.
5. Increasing Regulatory Demands and Legal Complexity
Regulations related to data privacy, environmental impact, and sustainability disclosures are changing rapidly. For businesses, this can create new compliance burdens and legal exposures—especially if they fall behind on emerging requirements.
Rules like the California Consumer Privacy Act (CCPA) are prompting companies to take data protection more seriously. In Europe, updated policies are making it easier for consumers to pursue legal action. Even insurance carriers are facing expanded regulatory oversight, which can influence how they design coverage for policyholders. For business leaders, reviewing insurance policies regularly is key to identifying overlooked exclusions or gaps tied to new laws.
6. Operational Risks from Rapid Technology Adoption
Companies are increasingly depending on digital tools—such as artificial intelligence, process automation, and cloud-based systems—to streamline operations. Yet these technologies come with their own set of risks. A system outage, AI miscalculation, or software error can trigger major disruptions, financial losses, or even legal liabilities.
In response, some insurers now offer specialized policies that cover system breakdowns or technology-driven interruptions. Still, businesses remain responsible for maintaining secure environments, keeping systems updated, and using emerging technologies responsibly. Blending strong digital governance with the right insurance coverage can help prevent costly setbacks.
Preparing for the Year Ahead
The biggest risks businesses face in 2026 are deeply interconnected. A cyber incident can lead to regulatory fines; a supply chain disruption can trigger revenue loss—and each of these scenarios can quickly multiply without the right protections in place. That’s why proactive planning is essential.
Regularly evaluating your insurance portfolio, strengthening your risk management approach, and staying current on emerging threats will help safeguard your operations as the year unfolds.
If you’d like support reviewing your policies or identifying areas of vulnerability, reach out to us. We’re here to help you understand your coverage and ensure your business is prepared for whatever 2026 brings.