As 2026 gets underway, organizations of all sizes are navigating a landscape that feels more unpredictable than ever. From massive legal judgments to fast‑evolving cyber threats, the challenges on the horizon are shifting quickly. Taking time to understand these emerging risks—and ensuring your insurance strategy is aligned with them—can play a major role in keeping your business resilient.
Below are six rising risks every company should keep an eye on this year.
1. Social Inflation and the Surge in Large Jury Awards
High-dollar jury verdicts, often exceeding $10 million, continue to increase across the country. These so‑called nuclear verdicts are driving up liability insurance premiums and making coverage harder to secure for many businesses. The broader trend, known as social inflation, stems from several factors: third‑party litigation funding, younger juries that tend to be more critical of corporations, and courtroom strategies designed to encourage higher settlements.
Sectors like healthcare, transportation, and manufacturing are feeling these impacts most significantly. While some insurers are turning to artificial intelligence to better forecast litigation outcomes and reduce exposure, and a few states are exploring reforms to rein in extreme jury awards, the reality is that social inflation remains one of the most costly and unpredictable issues for companies heading into 2026.
2. Evolving Cybersecurity Risks and AI‑Driven Attacks
Cyberattacks continue to grow more sophisticated, with criminals adopting advanced tools—including ransomware-as-a-service and artificial intelligence—to compromise networks, steal data, and disrupt operations. Even one successful attack can lead to major financial losses, regulatory penalties, and long-term reputational harm.
To stay ahead of these threats, businesses must invest in strong security practices. This includes multi-factor authentication, continuous threat monitoring, regular staff training, and keeping all systems properly updated. Cyber insurance plays an important role as well, though many policies now require organizations to meet minimum security standards. Today, prevention and insurability go hand in hand.
3. Climate-Related Events and Rising Property Losses
Natural disasters—such as hurricanes, wildfires, and flooding—are becoming more frequent and more severe. These weather-driven events are leading to higher property losses and causing insurers to reevaluate their participation in high-risk regions. In some areas, premiums have climbed sharply or insurers have withdrawn from the market altogether.
To combat these challenges, businesses are strengthening their facilities with resilient construction and upgraded materials. Others are turning to parametric insurance policies, which provide payouts based on predefined triggers like rainfall levels or wind speeds rather than waiting for damage assessments. This approach helps organizations get recovery funds more quickly. Preparing for extreme weather events is now a critical part of long‑term business planning.
4. Ongoing Supply Chain Strains and Operational Delays
Global supply chains remain vulnerable to disruptions. Port congestion, geopolitical tensions, labor shortages, and material scarcities continue to interrupt production and delay shipments. Even when a company is not directly harmed, problems upstream—such as a supplier shutdown—can create ripple effects that halt operations.
To mitigate these risks, many businesses are adopting specialized insurance options designed to address supply chain failures. These include coverage for delays caused by transportation issues, problems with critical vendors, or cyber incidents affecting logistics partners. With the right coverage in place, companies can maintain continuity even when external events interfere with normal operations.
5. Increasing Regulatory Demands and Legal Complexity
Regulations around data privacy, sustainability, and environmental responsibility are evolving at a rapid pace. These changes can introduce new compliance requirements, unexpected expenses, and potential liability exposure for businesses that fall behind.
Laws such as the California Consumer Privacy Act (CCPA) continue to reshape expectations around data protection. Meanwhile, several European regulations are making it easier for consumers to pursue legal claims. Insurers are also adapting to stricter regulatory oversight, which can influence how policies are structured and what exclusions apply. This makes it essential for businesses to regularly evaluate their coverage to ensure it reflects current legal standards and does not leave room for costly gaps.
6. Technology-Related Operational Vulnerabilities
As organizations adopt more digital systems—including automation tools, cloud platforms, and artificial intelligence—their operational risks are also evolving. Technology failures, software outages, or incorrect AI-driven decisions can lead to significant downtime, financial losses, or compliance issues.
Some insurers now offer specialized coverage for technology-related disruptions, but businesses must still take proactive steps to safeguard their digital ecosystems. This includes maintaining security protocols, backing up critical data, updating systems routinely, and ensuring responsible use of advanced tech tools. A balanced combination of strong digital governance and proper insurance protection can help companies avoid expensive setbacks.
Prepare for a Complex 2026
The risks on the horizon for 2026 are interconnected, with one challenge often triggering another. That’s why thoughtful preparation is more important than ever. By periodically reviewing insurance policies, refining risk management practices, and staying alert to emerging threats, businesses can better protect their operations and maintain long‑term stability.
If you’d like support evaluating your coverage or identifying potential areas of exposure, give us a call to schedule a personalized risk review tailored to your industry.
