6 Emerging Insurance Risks Businesses Should Prepare For in 2026

As 2026 gets underway, companies of all sizes are navigating a landscape that feels more uncertain than ever. Legal challenges, digital threats, and economic pressures are reshaping the way organizations manage risk. In this environment, staying ahead means understanding what’s changing—and making sure your insurance strategy evolves with it.

Below are six major risks gaining momentum this year, along with insights on how businesses can strengthen their protection.

1. Social Inflation and the Growth of Nuclear Verdicts

Large jury awards—often exceeding $10 million—are becoming more common across the U.S., especially in certain jurisdictions. These “nuclear verdicts” are pushing liability insurance premiums higher and making coverage harder to secure. The trend, known as social inflation, is influenced by several factors including third-party litigation funding, younger jurors’ skepticism toward big corporations, and legal strategies designed to sway emotions in the courtroom.

Industries like healthcare, automotive services, and manufacturing have felt the effects most strongly. Some insurers are beginning to rely on artificial intelligence to assess litigation risks more accurately, while lawmakers in various states are proposing changes to reign in excessive awards. Even so, social inflation remains one of the most difficult and costly risks for businesses to manage in 2026.

2. Cybersecurity Threats and AI‑Enhanced Attacks

Cybercriminals are becoming more sophisticated, using artificial intelligence, automated attack tools, and ransomware-as-a-service models to carry out highly targeted breaches. These attacks can compromise sensitive data, halt operations, and create long‑lasting reputational damage. A single incident can lead to extensive downtime, regulatory penalties, and expensive legal consequences.

To guard against these threats, businesses need robust cybersecurity practices. This includes multi-factor authentication, continuous threat‑monitoring systems, updated software, and ongoing employee training. Cyber insurance continues to play a key role, though most insurers require companies to meet specific security standards before issuing a policy. In today’s climate, strong prevention measures and cyber coverage must work hand in hand.

3. Natural Disasters and Climate‑Driven Losses

Severe weather events—such as hurricanes, floods, wildfires, and extreme storms—are occurring more frequently and causing greater damage. As a result, businesses located in high‑risk regions are finding it harder to obtain property insurance, and when they can, rates are climbing sharply. In some areas, carriers are withdrawing entirely, leaving fewer options for coverage.

Many organizations are responding by strengthening their physical infrastructure, from fire‑resistant materials to wind‑resilient building designs. Others are turning to parametric insurance, which provides payouts based on specific triggers like rainfall totals or wind speeds—speeding up recovery times by eliminating lengthy damage assessments. Preparing for extreme weather is now essential for long‑term operational resilience.

4. Supply Chain Challenges and Business Interruption

The global supply chain remains unstable. Port bottlenecks, critical material shortages, transportation delays, and geopolitical conflicts can disrupt operations even if a business itself is not directly affected. A setback for one supplier can trigger production delays, revenue losses, and unexpected expenses throughout the chain.

To mitigate these risks, businesses are turning to insurance products designed specifically for supply chain vulnerabilities. These policies may cover disruptions caused by supplier failures, transportation issues, or cyber incidents affecting logistics partners. The right coverage can help keep operations running when external events threaten stability.

5. Regulatory Compliance and Increasing Legal Complexity

New regulations are emerging quickly, particularly in areas like data privacy, environmental standards, and sustainability reporting. Companies that fail to keep up may face fines, lawsuits, and compliance costs. Updated privacy laws—including the California Consumer Privacy Act (CCPA) and similar regulations—continue to push organizations to strengthen data governance.

Meanwhile, consumer‑protection laws in Europe make it easier for individuals to take legal action, and insurance carriers themselves are being held to stricter standards. For businesses, it’s crucial to review policies regularly to ensure there are no overlooked exclusions or coverage gaps related to evolving regulatory requirements.

6. Technology‑Driven Operational Risks

With more organizations relying on artificial intelligence, automation, and cloud‑based tools, technology failures have become a significant operational hazard. A malfunctioning system, algorithm error, or software outage can lead to costly downtime, compliance issues, or even legal challenges.

Some insurers now offer specialized coverage for technology‑related disruptions, but businesses must still do their part by maintaining secure systems, updating software, and applying responsible oversight to AI‑driven tools. A combination of strong digital governance and the right insurance can help companies avoid expensive setbacks.

Looking Ahead in 2026

Many of the risks shaping 2026 are interconnected, meaning a single issue can create ripple effects across an organization. This makes a proactive risk‑management approach more important than ever. Regular insurance reviews, updated preparedness plans, and ongoing awareness of emerging threats can help businesses strengthen their protection and maintain continuity.

If you’d like help evaluating your coverage or identifying potential gaps, reach out to schedule a personalized risk review tailored to your company’s needs.