As 2026 gets underway, companies are stepping into a business environment that is more complex and uncertain than ever. Legal battles, advanced cyber threats, and climate-related challenges continue to evolve, reshaping the way organizations think about protection. Being proactive and ensuring you have the right insurance strategy in place can make a significant difference in staying resilient and competitive.
Below are six major risks businesses should have on their radar this year.
1. Growing Social Inflation and Increasing Nuclear Verdicts
High-value jury awards—often exceeding $10 million—are becoming more common, especially in certain states. These enormous verdicts, often referred to as nuclear verdicts, are pushing liability insurance premiums upward and making coverage more difficult to secure. The trend, known as social inflation, is influenced by outside funding of lawsuits, shifting attitudes among younger jurors, and courtroom strategies that lean heavily on emotional appeals.
Industries such as healthcare, automotive, and manufacturing are experiencing some of the most significant impacts. While insurers are experimenting with artificial intelligence to better forecast legal risks and lawmakers are proposing measures to limit excessive awards, social inflation remains one of the most unpredictable and costly challenges of 2026.
2. Rising Cyber Risks and AI-Enhanced Attacks
Cybercriminal activity is becoming more sophisticated as attackers adopt artificial intelligence, automated tools, and ransomware-as-a-service models. These methods can compromise sensitive data, shut down critical systems, or damage an organization’s reputation—all of which can lead to severe financial losses, fines, and legal consequences.
Businesses now need multilayered defenses to stay protected. This means implementing multi-factor authentication, ongoing employee training, advanced threat detection tools, and consistent software updates. Cyber insurance remains important, but most policies now require strong cybersecurity measures before coverage is granted. Prevention and insurance protection are becoming inseparable components of cyber readiness.
3. Climate-Driven Disasters and Property Losses
Severe weather events—including hurricanes, wildfires, and floods—are increasing in both frequency and intensity. These disasters are making property insurance more expensive and harder to obtain in high-risk areas. In some regions, insurers have reduced coverage options or exited the market altogether.
To address these challenges, many businesses are reinforcing buildings with durable materials and improved designs that can better withstand natural disasters. Others are turning to parametric insurance solutions, which issue payouts when specific conditions—such as wind speed or rainfall levels—are met. These policies allow organizations to access recovery funds more quickly. Preparing for extreme weather is now a critical part of long-term planning.
4. Ongoing Supply Chain Strain and Business Interruption
Global supply chain instability continues to disrupt operations across industries. Delays at ports, shortages of essential materials, and geopolitical conflicts can cause significant slowdowns. Even businesses not directly impacted by physical damage may still experience interruptions due to supplier issues.
To guard against these challenges, companies are exploring insurance coverage tailored to supply chain interruptions, trade disruptions, and cyber incidents affecting logistics partners. These policies help businesses maintain operations even when unforeseen issues affect their suppliers or transportation routes.
5. Increasing Regulatory Requirements and Legal Complexity
Regulatory expectations are shifting rapidly, particularly around data privacy, environmental responsibility, and transparency requirements. Staying compliant can be costly and time-consuming, and failing to keep up can lead to legal or financial consequences.
Regulations such as the California Consumer Privacy Act (CCPA) continue to raise the bar for data protection. In Europe, evolving consumer-facing rules are making it easier for individuals to take legal action. Insurance carriers are also facing tighter regulatory oversight, which influences how they structure policy language. Businesses should review their policies regularly to ensure there are no hidden exclusions or gaps tied to these developing legal standards.
6. Technology-Related Operational Risks
More companies are depending on digital tools—such as artificial intelligence, automation systems, and cloud technology—to streamline operations. While these tools can drastically increase efficiency, they also introduce new vulnerabilities. A simple system outage or an algorithmic error could disrupt operations or lead to expensive legal complications.
Many insurers now provide coverage specifically designed for technology failures and digital disruptions. Still, it’s essential for businesses to maintain strong internal oversight by updating systems consistently, strengthening digital governance, and ensuring their tools are secure. A balanced approach combining insurance and solid technology management practices is key to preventing costly downtime.
Preparing for the Year Ahead
The risks shaping the business world in 2026 are interconnected, meaning one issue can quickly trigger additional challenges. That’s why thoughtful preparation is vital. Reviewing current insurance policies, strengthening risk management strategies, and staying informed about emerging threats can help your organization stay protected and resilient.
If you'd like help evaluating your coverage or identifying potential gaps, we’d be happy to assist you. Reach out anytime to schedule a risk review tailored to your organization’s needs.