6 Emerging Insurance Risks Businesses Should Prepare For in 2026
Understanding the Changing Risk Landscape in 2026
As 2026 gets underway, companies of all sizes are navigating a business environment that feels more uncertain than ever. Legal exposures, cyberthreats, extreme weather, and evolving regulations are all shifting at a rapid pace. For many organizations, staying properly insured and proactively managing risk is becoming essential to long-term stability and growth.
Below are six major risk areas that business leaders should keep an eye on this year—and why reviewing your insurance strategy is more important than ever.
1. Social Inflation and the Growth of Nuclear Verdicts
In recent years, jury awards topping $10 million—often referred to as nuclear verdicts—have become increasingly common. These massive judgments are particularly frequent in certain states and have put upward pressure on liability insurance rates. The broader trend of social inflation is driving these outcomes, fueled by third-party litigation funding, generational shifts in jury attitudes, and legal strategies aimed at maximizing emotional impact.
Industries such as healthcare, manufacturing, and automotive are feeling the effects most intensely. While some insurers are experimenting with artificial intelligence to identify high-risk claims early, and several states are considering policy reforms, the overall unpredictability of jury-driven outcomes remains a costly challenge. Social inflation continues to be one of the most volatile risk categories for 2026.
2. Cybersecurity Escalation and AI-Enhanced Attacks
Cybercrime is evolving rapidly, with criminals leveraging tools like ransomware-as-a-service and artificial intelligence to carry out increasingly sophisticated attacks. A successful breach can bring business operations to a standstill, compromise sensitive information, trigger regulatory fines, and cause long-term reputational harm.
To strengthen digital defenses, businesses must take a layered approach. This includes strong identity verification, advanced threat detection and response tools, employee cybersecurity training, and consistent system updates. Cyber insurance continues to be a valuable safeguard, but most insurers now require specific security measures to qualify for coverage. In today’s world, prevention and insurance aren’t separate—they work together.
3. Increasing Natural Disasters and Climate-Related Losses
Extreme weather events—from major hurricanes to record-breaking wildfires and flooding—are becoming both more frequent and more destructive. As a result, many businesses located in at-risk areas are encountering shrinking property insurance options and rising premiums. In some regions, insurers have reduced their exposure or exited markets altogether.
Organizations are responding by investing in stronger building materials, better risk-mitigation strategies, and structural improvements designed to withstand severe weather. Additionally, some businesses are turning to parametric insurance solutions, which provide payouts based on measurable conditions such as rainfall totals or wind speeds. This can speed up recovery and ensure financial support arrives when it’s needed most. Planning for climate-related challenges is now a foundational part of long-term business continuity.
4. Ongoing Supply Chain Fragility and Operational Disruption
Global supply chain instability continues to cause delays, product shortages, and unpredictable costs. Factors such as geopolitical tension, material scarcity, port congestion, and transportation delays can disrupt business operations even if a company itself experiences no physical loss.
To help mitigate these vulnerabilities, many organizations are turning to insurance solutions designed for supply chain failures, trade-related setbacks, or disruptions affecting key vendors. These policies may also cover losses connected to cyberattacks on logistics networks or transportation partners. Having the right coverage in place ensures that a company can maintain operations—or recover quickly—when unexpected events ripple throughout the supply chain.
5. Evolving Regulations and Increasing Legal Complexity
Compliance requirements are shifting quickly, particularly around data privacy, sustainability, and environmental impact. New regulations can lead to additional operational expenses, increased reporting obligations, and heightened legal exposure if businesses are not prepared.
Rules such as the California Consumer Privacy Act (CCPA) have pushed organizations to significantly strengthen data protections, while recent European regulations have expanded consumer rights to pursue legal action. Even insurance carriers are navigating stricter oversight, which may alter how they structure coverage. To avoid costly gaps, businesses should frequently review their insurance policies and ensure they remain aligned with current legal expectations.
6. Technology-Driven Risks and System Reliability Challenges
With more companies relying on artificial intelligence, automation, and cloud-based platforms, the potential for technology-related disruptions is increasing. A malfunctioning algorithm, outage in a cloud service, or misconfigured automated system can cause anything from operational slowdowns to significant financial losses.
Some insurers are now offering specialized products designed to address system breakdowns or technology-driven interruptions. Still, it remains essential for businesses to maintain strong digital hygiene—including secure access controls, routine updates, reliable backups, and responsible AI governance. Combining comprehensive coverage with disciplined tech management can help reduce the risk of costly operational breakdowns.
Preparing for the Year Ahead
Each of these risks is interconnected, meaning a single incident—like a cyberattack or severe weather event—can trigger additional challenges across your operations. That’s why a proactive approach to risk management is more important than ever.
Regularly reviewing your insurance policies, staying up to date on emerging threats, and making strategic updates to your risk management plan can help keep your business strong and resilient in 2026.
If you’d like help evaluating your coverage or checking for potential gaps, reach out to schedule a customized risk review tailored to your industry and operations.