6 Key Insurance Risks Businesses Should Prepare for in 2026
As 2026 gets underway, companies are stepping into a business environment that feels more unpredictable than ever. Rising lawsuit costs, evolving cyber threats, and climate-driven challenges are reshaping how organizations think about risk. Understanding these trends—and having the right insurance protections in place—can help businesses stay resilient in the year ahead.
Below are six major risks every organization should keep on their radar in 2026.
1. Social Inflation and the Growth of Large Jury Verdicts
Jury awards reaching $10 million or more—commonly called nuclear verdicts—are becoming increasingly common, particularly in certain high-profile states. These outsized legal judgments continue to drive liability insurance prices upward and make coverage more difficult to secure.
This pattern, known as social inflation, is fueled by factors like outside groups funding lawsuits, younger jurors who tend to be more doubtful of large corporations, and courtroom strategies that aim to sway emotions. Industries such as healthcare, manufacturing, and automotive are feeling the greatest impact.
Some insurers are leaning on artificial intelligence to forecast litigation risk, and several states are exploring reforms to reduce extreme awards. Even so, social inflation remains a costly and unpredictable challenge for 2026.
2. Cyber Threats and the Rise of AI-Enhanced Attacks
Cybercrime is becoming more sophisticated, as criminals utilize tools like ransomware-as-a-service and artificial intelligence to launch targeted attacks. These incidents can result in stolen data, prolonged system outages, and financial penalties—not to mention serious damage to a company’s reputation.
To safeguard against these threats, organizations need layered cybersecurity protections. This includes multi-factor authentication, tools that monitor and respond to suspicious activity, consistent employee security training, and frequent software updates. Cyber insurance continues to be essential, but many insurers now require businesses to meet specific security criteria. Strong defenses and comprehensive coverage go hand in hand.
3. Climate-Driven Disasters and Rising Property Losses
Severe weather events—from wildfires to hurricanes to flooding—are occurring more often and at greater intensity. As a result, commercial property insurance has become harder to secure, particularly in high-risk zones. In some regions, insurers have even withdrawn coverage options entirely.
To lower their exposure, many companies are investing in more durable building materials and climate-resilient designs. Others are turning to parametric insurance, which pays out when preset conditions such as rainfall totals or wind speeds are reached. This model can provide faster financial relief after extreme weather. For today’s businesses, preparing for climate risks is no longer optional—it’s essential for long-term continuity.
4. Supply Chain Instability and Business Interruptions
Global supply chain issues continue to disrupt operations across many industries. Delays at key ports, shortages of crucial materials, and geopolitical conflicts can slow production and delivery—even when a business itself is not directly impacted.
To navigate this uncertainty, some organizations are adding insurance solutions that protect against disruptions involving suppliers or transportation routes. Coverage options now exist for trade interruptions, supply chain failures, and even cyber incidents affecting logistics partners. These protections help keep operations steady when unexpected problems arise.
5. Evolving Regulations and Increasing Legal Complexity
Regulations tied to data privacy, environmental obligations, and sustainability reporting are shifting quickly. Falling behind can lead to new expenses, compliance issues, or legal exposure for businesses of all sizes.
Rules such as the California Consumer Privacy Act (CCPA) are raising expectations for data handling, while evolving laws in Europe are making it easier for individuals to pursue claims. Insurers are also navigating stricter regulatory standards, which can influence how policies are structured. Regular policy reviews are important to ensure businesses are not caught off guard by exclusions or requirements tied to newly implemented rules.
6. Technology Reliance and Digital Operational Risks
Organizations are adopting advanced tools—including artificial intelligence, automation systems, and cloud-based platforms—to streamline operations. While these tools offer big advantages, they also introduce new forms of risk. A single system failure, coding error, or AI misjudgment can trigger costly downtime or legal complications.
Many insurers now offer coverage designed specifically for technology-related failures or digital disruptions. Still, it’s critical for businesses to maintain strong cybersecurity, conduct regular system updates, and ensure their tech tools are used responsibly. Combining thoughtful digital practices with the right insurance protection reduces the chance of unexpected setbacks.
Be Prepared for a Complex 2026
The risks businesses face this year are increasingly interconnected, meaning one issue can quickly create ripple effects. Staying proactive by reviewing insurance policies, strengthening risk management strategies, and keeping up with emerging trends can help protect your organization and support long-term success.
If you’d like help evaluating your coverage or spotting potential gaps, give us a call to set up a personalized risk review tailored to your industry and needs.