6 Emerging Insurance Risks Businesses Should Prepare For in 2026

The start of 2026 brings a new wave of uncertainty for business owners. Economic pressures, technological evolution, and shifting legal landscapes are creating an environment where risks change faster than ever. Companies that want to stay resilient must understand these challenges and ensure they have insurance strategies that keep pace.

Below are six rising risks that organizations should keep a close eye on throughout 2026.

1. Social Inflation and the Growth of High-Dollar Verdicts

Large jury awards—often $10 million or more—are becoming increasingly common across the U.S. These so‑called “nuclear verdicts” are putting significant strain on liability insurance markets, pushing premiums up and limiting coverage options. This pattern, often grouped under the term social inflation , is fueled by outside litigation funding, younger jurors showing growing distrust toward corporations, and emotionally charged trial strategies that push for steeper payouts.

Industries such as manufacturing, automotive, and healthcare are feeling the impact most acutely. Some insurers are experimenting with artificial intelligence to anticipate legal exposures, while lawmakers in several states are evaluating reforms to rein in excessive awards. Even with these initiatives, social inflation remains one of the costliest and least predictable threats businesses will face this year.

2. Cyber Risks in the Era of AI‑Enhanced Attacks

Cybercriminals are becoming more advanced, using sophisticated ransomware-as-a-service models and artificial intelligence tools to carry out targeted attacks. These threats can compromise sensitive information, halt business operations, and severely damage customer trust. For many organizations, the financial fallout from a single breach—including downtime, regulatory penalties, and legal liabilities—can be devastating.

To stay prepared, companies must strengthen their cybersecurity practices. This includes implementing multi‑factor authentication, continuous threat monitoring, employee training programs, and routine software updates. Cyber insurance remains a critical layer of protection, but most insurers now require businesses to follow strict security protocols before issuing coverage. In today’s threat environment, prevention and insurance are inseparable.

3. Climate‑Driven Disasters and Rising Catastrophe Losses

Severe weather events such as wildfires, floods, and hurricanes are increasing in both frequency and intensity. As a result, businesses located in high‑risk regions are experiencing higher insurance costs and, in some cases, losing access to traditional property coverage altogether. Some carriers have reduced their presence in vulnerable markets, leaving companies to search for alternative risk solutions.

To combat these challenges, organizations are investing in stronger infrastructure—think fire‑resistant building materials, improved drainage systems, and enhanced storm‑proofing measures. Others are turning to parametric insurance options, which pay out automatically when specific conditions like rainfall totals or wind speeds are met. This model speeds up recovery and reduces uncertainty. Preparing for climate‑related disruptions is no longer optional—it’s essential for long‑term resilience.

4. Ongoing Supply Chain Instability and Operational Disruptions

Global supply chains continue to experience turbulence. Shortages of raw materials, geopolitical tensions, and bottlenecks at ports can disrupt production schedules and reduce profitability. Even if your business avoids direct damage, problems affecting suppliers or transportation partners can create significant operational setbacks.

To manage these exposures, many organizations are adopting insurance coverage specifically designed for supply chain vulnerabilities. These policies can address losses tied to supplier failures, transportation delays, political unrest, or cyberattacks targeting logistics networks. With the right insurance in place, companies are better positioned to keep operations moving during unexpected disruptions.

5. Increasing Regulatory Pressures and Evolving Legal Requirements

Regulation is changing rapidly across multiple areas—from environmental mandates to data privacy rules and ESG reporting standards. For businesses, this creates new compliance responsibilities and potential legal risks. Falling behind on emerging laws can result in penalties, lawsuits, or gaps in insurance coverage.

Legislation like the California Consumer Privacy Act (CCPA) continues to push organizations toward stronger data‑protection practices. Meanwhile, European regulatory bodies are adopting new frameworks that simplify the process for consumers to pursue claims. Even insurance carriers are facing heightened scrutiny, which influences how policies are underwritten. Regular policy reviews can help ensure your coverage keeps pace with regulatory shifts and doesn’t leave critical exposures unaddressed.

6. Technology‑Related Operational Risks

As businesses expand their use of artificial intelligence, automation tools, and cloud‑based systems, new vulnerabilities are emerging. System failures, software outages, or flawed AI‑driven decisions can result in financial losses, reputational harm, or legal complications. Although technology brings efficiency, overreliance without proper safeguards can amplify risk.

Some insurers now provide specialized protection for issues related to technological breakdowns or digital infrastructure failures. Still, companies must take an active role in monitoring their tech stack, updating systems regularly, and ensuring responsible use of emerging tools. A combined approach—strong internal controls supported by the right insurance—provides the best defense against tech‑related disruptions.

Preparing for a Complex 2026

The landscape of business risk in 2026 is more interconnected than ever. A single event can trigger a chain reaction, affecting legal exposure, supply chains, operations, and more. That’s why proactive planning is essential. Reviewing your insurance program regularly, updating risk‑management strategies, and staying informed about new threats can help safeguard your business in an unpredictable environment.

If you’d like help evaluating your current coverage or identifying potential gaps, we’re here to assist. Reach out anytime to schedule a risk review tailored specifically to your business and industry needs.