6 Emerging Insurance Risks Businesses Should Prepare for in 2026

Understanding the Changing Risk Landscape

As 2026 gets underway, organizations of all sizes are navigating a business environment that feels more uncertain than ever. Legal challenges, technology vulnerabilities, and climate‑related disruptions are evolving rapidly, creating new complexities for leaders who want to protect their operations. Staying ahead of these shifts and ensuring your insurance coverage keeps pace can play a major role in long‑term resilience.

Below are six emerging risks that deserve close attention this year—along with insights into how businesses can stay prepared.

1. Social Inflation and the Surge in Nuclear Verdicts

“Nuclear verdicts”—jury awards that exceed $10 million—are becoming increasingly common, particularly in states known for aggressive litigation environments. These enormous judgments continue to push liability premiums higher and make coverage more difficult to secure. This escalation, widely referred to as social inflation, stems from several factors: outside funding of lawsuits, shifting attitudes among younger jurors toward corporations, and emotional legal strategies that encourage higher payouts.

Industries such as healthcare, transportation, and manufacturing feel the greatest strain. While some insurers are turning to artificial intelligence to evaluate legal exposure, and lawmakers are exploring policies aimed at curbing excessive awards, the unpredictability of social inflation remains a costly concern for 2026.

2. Cybersecurity Risks and Smarter AI‑Driven Attacks

Cybercriminals are getting smarter—and so are their tools. With the growth of ransomware‑as‑a‑service platforms and AI‑enhanced attack strategies, cyber incidents have become more damaging and more difficult to detect early. A single breach can lead to lost revenue, regulatory fines, and long‑term reputational harm.

Organizations that want to avoid major disruptions must invest in strong defenses. Multi‑factor authentication, proactive threat‑response tools, consistent employee training, and routine software updates are essential. Cyber insurance can provide an additional layer of protection, but many carriers now require companies to demonstrate robust cybersecurity practices before offering coverage.

3. Climate‑Related Losses and Increasing Natural Disaster Exposure

Hurricanes, wildfires, floods, and other natural disasters are becoming more severe and more frequent, leading to significant insurance challenges—particularly for businesses in high‑risk regions. Rising claims have prompted some insurers to scale back on coverage or exit certain markets entirely, making it harder for companies to secure policies at sustainable rates.

To strengthen their defenses, many organizations are investing in resilient construction materials, improved building designs, and updated risk‑mitigation strategies. Some are also exploring parametric insurance options, which offer payouts based on specific triggers—such as rainfall totals or wind speed—allowing businesses to access recovery funds faster without waiting for traditional assessments. Preparing for extreme weather is no longer optional; it’s a crucial element of strategic planning in 2026.

4. Supply Chain Vulnerabilities and Business Interruption

Despite attempts to stabilize global logistics networks, supply chain challenges continue to affect countless industries. Delays at major ports, shortages of essential components, and geopolitical tensions all contribute to ongoing disruptions that can halt production or delay customer deliveries.

Even businesses that haven’t suffered direct physical damage can experience operational interruptions due to supplier issues. That’s why many organizations are turning to specialized insurance solutions that address problems such as third‑party shutdowns, manufacturing slowdowns, or cyber incidents affecting logistics partners. These coverage options can help companies maintain continuity during disruptive events outside their control.

5. Evolving Regulations and Increasing Legal Complexity

Compliance obligations are changing rapidly, particularly in areas such as data privacy, environmental reporting, and sustainability standards. These updates can create new operational challenges—and potential penalties—for companies that aren’t keeping up.

Laws like the California Consumer Privacy Act (CCPA) continue to push businesses to strengthen data governance practices, while new European regulations make it easier for individuals to take legal action. Meanwhile, insurance carriers are facing additional oversight themselves, which may influence policy structures and exclusions. Regular policy reviews are essential to avoid unexpected gaps in coverage as regulations shift.

6. Operational Risks Stemming from Technology Adoption

Tools like automation, artificial intelligence, and cloud‑based software are now central to modern business operations. While these technologies can greatly improve efficiency, they also open the door to new vulnerabilities. System failures, automation errors, or flawed AI decisions can disrupt workflows, cause costly downtime, or even expose organizations to legal issues.

Many insurers now provide coverage designed specifically for technology‑related failures, but businesses still play a critical role in minimizing risk. Keeping systems updated, monitoring digital tools carefully, and implementing secure processes can reduce the likelihood of expensive tech‑related setbacks.

Preparing for a Connected Risk Environment in 2026

The challenges businesses face this year are closely intertwined, meaning one issue can quickly escalate into another. With so many moving pieces, it’s more important than ever to build a proactive risk management strategy. Reviewing your insurance program regularly, staying aware of emerging threats, and updating internal processes can help safeguard your organization against unexpected disruptions.

If you’d like help evaluating your current coverage or identifying areas of potential exposure, give us a call. We’re here to support you with a customized risk review tailored to your industry and operational needs.