6 Key Insurance Risks Businesses Should Prepare for in 2026

As 2026 gets underway, companies are stepping into a landscape filled with new challenges and fast‑shifting threats. From legal pressures to advanced cyber incidents, the risks facing organizations today are more complex than ever. Staying informed and making thoughtful coverage decisions can help businesses remain resilient in the year ahead.

Below are six major insurance risks that every organization should keep on their radar in 2026:

1. Growing Social Inflation and Increasing Nuclear Verdicts

Large jury awards—often topping $10 million—continue to become more common, especially in certain regions. These massive payouts, known as nuclear verdicts, are pushing liability insurance prices upward and making coverage harder to secure. The broader trend, referred to as social inflation, is fueled by lawsuit funding from outside investors, shifting viewpoints among younger jurors, and highly emotional arguments presented in court.

Industries such as healthcare, manufacturing, and automotive are among the most affected. To combat rising legal exposure, some insurers are turning to artificial intelligence to evaluate litigation risk, while lawmakers are considering reforms aimed at curbing excessively high awards. Still, social inflation remains one of the most unpredictable and costly challenges businesses will face throughout 2026.

2. Evolving Cyber Threats and AI-Driven Attacks

Cybercriminals are rapidly advancing their methods, using sophisticated tools like artificial intelligence and subscription-based ransomware services to execute more precise and damaging attacks. These threats can result in stolen data, operational shutdowns, reputational harm, regulatory fines, and expensive recovery efforts.

To strengthen their defenses, companies need to adopt multi-layered cybersecurity practices. Key protections include multi-factor authentication, automated threat monitoring, thorough employee training, and consistent software maintenance. Cyber insurance is also playing a larger role in risk management, but many policies require businesses to meet specific security standards. As a result, prevention and insurance have become inseparable parts of modern protection strategies.

3. Climate-Driven Disasters and Rising Property Losses

Extreme weather events—such as wildfires, hurricanes, and severe flooding—continue to increase in both frequency and severity. This shift is making property insurance more expensive and, in some cases, nearly impossible to obtain in high-risk regions. In certain states, some carriers have even withdrawn from the market entirely.

To reduce vulnerability, many companies are reinforcing facilities with stronger materials, improved fire-resistant features, and updated building designs. Others are turning to parametric insurance, which issues payouts based on measurable conditions like rainfall totals or wind speeds, bypassing lengthy claims evaluations. Preparing for climate-related risks has become essential for maintaining long-term operational stability.

4. Ongoing Supply Chain Challenges and Interruption Losses

Global supply chains continue to experience disruptions ranging from labor shortages and shipping delays to geopolitical tensions. These issues can affect businesses even when the disruption occurs several steps upstream. A single outage or slow-down at a supplier can trigger delays, lost revenue, and increased costs.

To manage these uncertainties, companies are considering specialized insurance options that cover losses caused by supplier breakdowns, trade interruptions, or cyber incidents targeting logistics partners. These policies can help stabilize operations when unpredictable events derail normal workflows, making them increasingly valuable in a volatile global environment.

5. Complex Regulations and Increasing Compliance Pressure

Governments around the world are tightening rules related to privacy, environmental responsibility, and corporate reporting. These evolving requirements create new financial and legal exposure for businesses that fail to adapt quickly enough.

For example, data protection laws such as the California Consumer Privacy Act (CCPA) demand stronger safeguards and transparency. Meanwhile, European regulations continue to expand consumer rights and make it easier to pursue legal claims. Insurers are also facing heightened scrutiny, which can influence how policies are written and what exclusions apply. Regular policy reviews are essential to ensure businesses aren’t caught off guard by hidden limitations tied to new laws.

6. Technology-Related Operational Risks

As organizations increasingly rely on automation, artificial intelligence, and cloud-based tools, new types of operational risks are emerging. System outages, software malfunctions, or flawed AI decision-making can lead to downtime, financial losses, or legal liabilities.

Some insurers now offer specialized coverage for technology failures and digital system disruptions. Even so, companies must play an active role by securing their systems, updating software regularly, monitoring their digital environment, and implementing responsible AI practices. A combination of the right safeguards and insurance solutions can significantly reduce exposure to tech-related problems.

Preparing for a Challenging Year Ahead

The risk landscape in 2026 is highly interconnected. A disruption in one area—from a cyber incident to a regulatory shift—can quickly ripple through a business. That’s why proactive planning is more important than ever.

Regularly reviewing insurance policies, strengthening risk management practices, and staying aware of emerging threats can help businesses protect their operations and keep moving forward with confidence.

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