As 2026 gets underway, companies of all sizes are navigating a landscape that feels more unpredictable than ever. From escalating lawsuits to increasingly sophisticated cyber threats, the challenges facing modern organizations continue to evolve at a rapid pace. Proactive planning and the right insurance coverage remain essential for long-term resilience.
Below are six major risks that businesses should keep on their radar this year:
1. Social Inflation and the Growth of Nuclear Verdicts
Multi-million-dollar jury awards—often topping $10 million and referred to as nuclear verdicts—are becoming more common, particularly in certain regions. These soaring judgments are pushing liability insurance prices upward and making coverage more difficult to secure. The trend, known as social inflation, stems from investor-backed lawsuits, shifting attitudes among younger jurors, and legal strategies designed to drive higher settlements.
Industries such as healthcare, transportation, and manufacturing are feeling this pressure most severely. While some insurers are adopting artificial intelligence to better forecast legal exposures and state lawmakers consider reforms to curb excessive verdicts, the issue remains a major and unpredictable concern for organizations heading into 2026.
2. Evolving Cyber Threats and AI-Assisted Attacks
Cybercriminal tactics are advancing at an alarming rate. Attackers now have access to tools like ransomware-as-a-service and AI-driven programs that can infiltrate systems, steal sensitive information, and damage a company’s operations or reputation. The financial fallout from a single cyber incident can be staggering, encompassing downtime, regulatory penalties, and legal repercussions.
Strong cybersecurity practices are essential. This includes multi-factor authentication, real-time threat monitoring solutions, routine staff training, and consistent software updates. Cyber insurance continues to play a crucial role as well, though most policies now require organizations to meet specific security standards. Today, cybersecurity preparedness and insurability are closely connected.
3. Climate-Driven Disasters and Rising Property Losses
Severe weather events like wildfires, storms, and flooding are increasing in both frequency and intensity. As a result, businesses located in vulnerable areas are finding it more challenging to obtain or maintain property insurance at affordable rates. In certain regions, insurers are even exiting the market entirely due to the growing risk.
To combat these challenges, many companies are strengthening their buildings with resilient materials and improved construction designs. Others are turning to parametric insurance models, which issue payouts when measurable conditions—such as wind speed or rainfall levels—are met, simplifying and speeding up the recovery process. Preparing for climate-related events is now a critical part of long-term business planning.
4. Ongoing Supply Chain Strain and Operational Delays
Global supply chain instability continues to disrupt business operations. Port congestion, material shortages, geopolitical conflicts, and other external pressures can delay shipments or halt production entirely. Even if a business is not directly affected, disruptions within the supply network can ripple outward, interrupting operations.
To mitigate this, companies are increasingly relying on specialized insurance solutions that cover losses tied to supplier outages or transportation issues. These policies may include protection against trade interruptions, supply chain breakdowns, or cyber incidents involving logistics partners. Having the right coverage in place can help keep operations steady when unexpected obstacles arise.
5. Rapid Regulatory Shifts and Compliance Challenges
Regulatory requirements are evolving quickly, especially in areas like data privacy, environmental compliance, and sustainability disclosures. These changes can introduce new expenses and potential legal risks for businesses that fail to stay ahead of emerging rules.
Regulations such as the California Consumer Privacy Act (CCPA) continue to drive stricter standards around data protection. Across Europe, new consumer-focused laws are increasing the likelihood of legal action. At the same time, insurance carriers face their own compliance burdens, which may influence policy terms for their clients. Regularly reviewing insurance coverage is essential to avoid hidden exclusions or gaps tied to the latest regulatory updates.
6. Technology-Related Operational Risks
Organizations are leaning more heavily than ever on cloud systems, automation tools, and artificial intelligence. While these technologies can significantly boost productivity, they also introduce new vulnerabilities. A malfunctioning system or flawed AI output can trigger costly downtime, data errors, or legal complications.
Some insurers now offer specialized protection for technology failures and digital interruptions. However, businesses still bear responsibility for safeguarding their systems through consistent updates, secure configurations, and responsible tech use. Combining strong digital oversight with adequate insurance coverage can help reduce the likelihood of expensive disruptions.
Stay Prepared for the Year Ahead
The risks businesses face in 2026 are interconnected, meaning one challenge can quickly influence another. That’s why proactive preparation is key. Reviewing insurance policies regularly, updating risk management practices, and staying informed about emerging threats can help organizations stay resilient.
If you’d like support evaluating your current coverage or uncovering potential gaps, feel free to reach out. We’re here to help you build a risk strategy tailored to your operations and industry.
