6 Emerging Insurance Risks Businesses Should Prepare for in 2026

As 2026 gets underway, companies are navigating a business environment that feels more unpredictable than ever. Legal pressures, rapid technological change, and global instability are reshaping the risk landscape at a remarkable pace. To stay resilient, organizations need to understand what’s coming and ensure their insurance strategies can withstand today’s evolving challenges.

Below are six major risks businesses should have on their radar this year—along with why they matter and how smart preparation can make all the difference.

1. Social Inflation and Escalating Nuclear Verdicts

Large jury awards—those reaching $10 million or more—are becoming increasingly common across the country. These “nuclear verdicts” are pushing liability insurance costs upward and making affordable coverage harder to secure. This trend, known as social inflation, is influenced by several factors: litigation funding from outside investors, younger jurors who are more skeptical of corporations, and emotional courtroom strategies that drive higher settlement expectations.

Industries such as manufacturing, automotive, and healthcare are feeling the most pressure. Some insurers are leaning on artificial intelligence to help forecast legal exposure, and certain states are exploring legislative efforts aimed at curbing excessive payouts. Even so, social inflation is shaping up to be one of the toughest and most expensive challenges of 2026.

2. Cybersecurity Threats Accelerated by AI

Cyberattacks are growing more advanced, and the tools available to criminals continue to improve. Threat actors are now leveraging artificial intelligence and “ransomware-as-a-service” platforms to launch sophisticated attacks that can compromise data, shut down operations, or damage brand trust. A single breach can lead to severe financial loss, fines, and legal fallout.

Strong cybersecurity measures are essential. Companies must adopt multi-factor authentication, implement threat detection and response systems, conduct recurring employee training, and maintain up‑to‑date software across all devices. Cyber insurance remains an important safeguard, but most policies now require meeting specific security standards. Prevention and insurance protection have become inseparable.

3. Climate‑Driven Catastrophes and Rising Property Losses

Hurricanes, floods, wildfires, and other severe weather events are happening more frequently and causing higher losses than ever before. As a result, businesses in vulnerable regions are finding it increasingly difficult or expensive to obtain property insurance. In some areas, carriers have scaled back or exited the market entirely.

To adapt, many organizations are strengthening facilities with resilient building materials, better flood prevention strategies, and improved fire‑resistant designs. Others are turning to parametric insurance, which pays based on predefined triggers—such as wind speed or rainfall—rather than waiting for damage assessments. With extreme weather becoming less predictable, proactive planning is now a core part of long-term business continuity.

4. Supply Chain Instability and Business Interruption

Global supply chains remain under pressure. Port congestion, material shortages, geopolitical tension, and transportation delays continue to disrupt production and delivery schedules. Even companies not directly affected by physical damage can experience major interruptions if a key supplier encounters problems.

To manage this risk, many organizations are investing in insurance solutions designed specifically for supply chain disruptions. Coverage may include protection against shipping delays, supplier breakdowns, political upheaval, or cyber incidents affecting logistics partners. These policies can help ensure operations stay on track even when external events threaten to slow things down.

5. Complex Regulatory Shifts and Compliance Obligations

Rules governing data privacy, environmental impact, and sustainability reporting are evolving rapidly. Businesses that fail to keep up may face new costs, penalties, or legal exposure.

Laws such as the California Consumer Privacy Act (CCPA) are prompting companies to rethink how they handle personal information. Meanwhile, European regulations continue to strengthen consumer rights, making it easier for individuals to pursue legal claims. Insurance carriers are also adjusting their own practices to align with tighter regulations—changes that can affect policy terms and coverage availability. Regular policy reviews are essential to ensure compliance gaps or hidden exclusions don’t create unexpected vulnerabilities.

6. Technology‑Related Operational Risks

Digital transformation is accelerating across nearly every industry. Businesses are increasingly reliant on automation, cloud platforms, and artificial intelligence to streamline workflows and improve efficiency. But as reliance on technology increases, so do the risks. System outages, software failures, or flawed AI‑driven decisions can trigger downtime, financial losses, or legal consequences.

Some insurers now offer specialized coverage for technology failures, but coverage alone isn’t enough. Companies must regularly update their systems, evaluate the reliability of digital tools, and implement strong oversight to ensure technology is being used responsibly. A balanced mix of insurance protection and sound digital governance can prevent costly tech‑related disruptions.

Staying Prepared for 2026

The challenges facing businesses this year are interconnected—one issue often amplifies another. That’s why proactive planning is essential. Reviewing existing insurance policies, refreshing risk management strategies, and keeping an eye on emerging trends can help companies stay ahead of the curve.

If you’d like support reviewing your current coverage or identifying potential gaps, reach out to schedule a personalized risk assessment tailored to your industry and business needs. Being prepared today can make all the difference tomorrow.