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‑evolving threats. From legal trends to advanced cybercrime, the risk environment is changing quickly—and businesses that plan ahead will be better positioned to stay resilient. The right insurance strategy, paired with thoughtful risk management, can help organizations protect themselves and maintain strong operations throughout the year.

Below are six major risks every business should keep an eye on in 2026:

1. The Growing Impact of Social Inflation and Nuclear Verdicts

Jury awards exceeding $10 million—often called nuclear verdicts—are becoming more frequent, especially in certain regions of the country. These massive judgments are pushing liability insurance rates higher and making coverage harder to secure. The trend, known as social inflation, is being fueled by investor-funded lawsuits, younger jurors who tend to question corporate practices, and emotional trial strategies aimed at driving up settlement amounts.

Industries such as healthcare, automotive, and manufacturing are feeling the squeeze most acutely. Some insurers are using artificial intelligence to anticipate legal risks, and some states are weighing new legislation aimed at curbing excessive awards. Even so, social inflation remains one of the most unpredictable and financially significant risks for businesses in 2026.

2. Escalating Cybersecurity Risks and AI‑Driven Attacks

Cyber threats continue to grow in complexity. Criminals are tapping into tools like ransomware-as-a-service and artificial intelligence to execute targeted attacks that can steal sensitive data, disrupt operations, or damage a company’s reputation. A single incident can lead to costly downtime, steep regulatory penalties, and potential lawsuits.

To stay ahead of these threats, organizations need a layered cybersecurity strategy. Essential measures include multi-factor authentication, real-time threat detection tools, comprehensive employee security training, and consistent software updates. Cyber insurance is also an important safety net, though most policies require businesses to meet certain security standards before coverage applies. Prevention and insurance now function as a combined defense.

3. Climate‑Related Losses and Increasing Natural Disasters

More frequent and severe natural disasters—such as hurricanes, wildfires, and floods—are creating significant challenges for businesses, particularly those in high‑risk regions. Rising claims have pushed some insurers to limit coverage or withdraw from certain markets altogether, making property insurance more expensive and harder to obtain.

To address these challenges, many companies are reinforcing their buildings with resilient materials and updated designs. Others are turning to parametric insurance, which provides payouts based on measurable triggers like wind speed or rainfall levels rather than waiting for damage assessments. Preparing for extreme weather is now an essential part of long‑term business planning.

4. Supply Chain Vulnerabilities and Operational Interruptions

Global supply chains continue to experience strain, with delays, material shortages, and geopolitical tensions affecting timely deliveries. Even if a company isn’t directly impacted, disruptions at the supplier level can bring operations to a halt.

To limit exposure, many businesses are adding insurance options that protect against interruptions caused by supplier failures, transportation issues, or cyberattacks involving logistics partners. These specialized policies—covering supply chain breakdowns, trade disruptions, and more—help keep operations moving when external events cause sudden complications.

5. Rapid Regulatory Changes and Rising Compliance Obligations

Regulations are shifting quickly, particularly in areas like data privacy, environmental compliance, and sustainability reporting. Companies that fail to stay current face increased legal exposure, higher costs, and potential penalties.

Regulations such as the California Consumer Privacy Act (CCPA) continue to push organizations to strengthen their data protection practices. Across the globe, new rules are enabling consumers to take more legal action. Insurers are also adapting to stricter oversight, which can influence how policies are written and what they cover. For businesses, routinely reviewing insurance policies is essential to avoid unexpected exclusions tied to evolving rules.

6. Technological Dependence and Operational Tech Failures

As organizations adopt more digital tools—including artificial intelligence, automation platforms, and cloud-based systems—they gain efficiency but also introduce new forms of risk. A malfunctioning system, flawed AI output, or major outage can result in costly downtime or legal exposure.

In response, insurers are offering new products designed to cover system failures and technology‑related disruptions. Still, businesses must take responsibility for maintaining strong digital governance: securing their systems, updating software regularly, and monitoring how technology is used. A thoughtful combination of insurance coverage and proactive digital management can help prevent expensive setbacks.

Prepare for What’s Ahead in 2026

The risks shaping 2026 are deeply interconnected—issues in one area can ripple quickly into others. Staying ahead requires consistent planning, regular reviews of insurance coverage, and ongoing monitoring of emerging threats. By staying informed and updating risk management strategies, businesses can build a more resilient foundation for the year ahead.

If you’d like support reviewing your policies or identifying potential coverage gaps, we’re here to help. Give us a call to schedule a customized risk review tailored to your business and industry.