6 Key Insurance Risks Businesses Should Prepare for in 2026

Understanding the Changing Risk Landscape in 2026

As 2026 gets underway, businesses are navigating an environment that feels more uncertain than ever. Legal pressures, cybercrime, extreme weather, and rapid technology shifts are reshaping the challenges companies must plan for. Having the right insurance strategy isn’t just helpful—it’s essential for long-term resilience.

Below are six emerging risks companies should keep top of mind this year.

1. Social Inflation and the Surge in Nuclear Verdicts

Jury awards hitting $10 million and higher—often called nuclear verdicts—are becoming increasingly common, particularly in certain regions of the country. These massive payouts are pushing liability insurance premiums upward and making it difficult for many businesses to secure the affordable coverage they need. The broader trend, known as social inflation, is fueled by third-party litigation funding, younger jurors’ distrust of large corporations, and legal strategies that rely heavily on emotional appeals.

Industries such as healthcare, auto services, and manufacturing are feeling this pressure most intensely. Some insurers are experimenting with artificial intelligence to better anticipate litigation risks, and several states are considering reforms aimed at curbing excessive jury awards. Even so, social inflation remains one of the most unpredictable and costly concerns for businesses in 2026.

2. Cyber Threats Accelerated by AI

Cyberattacks continue to grow more complex and harder to defend against. Hackers are now using AI-driven tools, advanced ransomware platforms, and automated attack techniques to steal sensitive information, disrupt operations, and damage brand reputation. A single successful cyberattack can lead to major expenses related to downtime, legal costs, regulatory fines, and recovery efforts.

To reduce exposure, businesses need layered cybersecurity protections. That includes multi-factor authentication, continuous threat detection, employee awareness training, and consistent software updates. Cyber insurance also plays a critical role, but many policies require companies to meet strict security standards before coverage applies. Strong prevention practices and insurance protection now go hand in hand.

3. Climate-Related Disasters and Rising Property Losses

Severe weather events are happening more frequently and creating larger losses than in years past. Hurricanes, wildfires, and flooding are straining the insurance market and forcing carriers to raise premiums or reduce offerings in high-risk areas. In some regions, insurers are stepping away from the market altogether.

To mitigate these challenges, businesses are investing in stronger construction materials, improved structural designs, and technologies that reduce vulnerability to extreme conditions. Some organizations are also turning to parametric insurance—coverage that pays out automatically when pre-defined conditions such as wind speed or rainfall levels are met. These options help businesses recover faster without waiting for lengthy claims assessments. Preparing for extreme weather is now essential for long-term operational stability.

4. Ongoing Supply Chain Challenges and Business Interruption Risks

Global supply disruptions continue to affect companies across industries. Delays at ports, material shortages, geopolitical conflicts, and transportation issues can slow production or cause inventory gaps. Even if a company is not directly impacted by physical damage, operational interruptions at a supplier or shipping hub can create costly ripple effects.

More businesses are responding by adding specialized insurance for contingent business interruption, supply chain failures, trade disruptions, and even cyber events affecting logistics partners. These policies help protect revenue when external disruptions interfere with normal operations. With global uncertainties unlikely to fade soon, insurance coverage that addresses supply chain vulnerabilities is becoming increasingly valuable.

5. Increasing Regulatory Demands and Legal Complexity

New rules related to data privacy, environmental impact, and sustainability reporting are evolving rapidly. Companies that fall behind risk penalties, lawsuits, or forced operational changes. Regulations like the California Consumer Privacy Act (CCPA) continue to raise expectations around data management, while EU legislation is making it easier for consumers to pursue legal claims.

Insurance carriers are also facing heightened regulatory oversight, which influences how policies are written, priced, and renewed. To avoid coverage gaps, businesses need to stay on top of emerging regulations and regularly review policy language to ensure exclusions or limitations don’t create unexpected exposure. Being proactive can prevent costly surprises.

6. Technology-Related Operational Failures

As companies adopt artificial intelligence, automation, and cloud-based systems to streamline operations, they also introduce new areas of risk. Technology is powerful, but failures—whether caused by software errors, outages, or flawed AI decision-making—can lead to downtime, data loss, or legal consequences.

Some insurers now provide specialized coverage to protect against system breakdowns and technology-driven disruptions. Still, businesses must take responsibility for maintaining strong digital governance. That includes regular system updates, cybersecurity audits, and clear policies for ethical AI use. Having modern insurance coverage combined with sound digital practices helps prevent small tech issues from becoming major business problems.

Preparing for a More Complex 2026

Many of the risks facing businesses this year are interconnected—one event can easily trigger another. That’s why thoughtful planning and consistent policy reviews are vital. By updating risk management strategies, staying informed about emerging threats, and ensuring insurance coverage matches current exposures, companies can better protect themselves in a fast-changing environment.

If you’d like help evaluating your coverage or identifying potential gaps, reach out to schedule a personalized risk assessment for your business.