6 Emerging Insurance Risks Every Business Should Prepare for in 2026

As we move into 2026, companies are navigating an increasingly complicated risk landscape. Legal pressures, climate-related challenges, and fast‑evolving technology threats are creating new vulnerabilities for organizations of all sizes. Staying informed—and ensuring your insurance strategy keeps pace—is essential for long‑term protection and stability.

Below are six major risk areas businesses should keep a close eye on this year.

1. Social Inflation and the Surge in Nuclear Verdicts

Businesses are encountering a growing wave of massive jury awards—verdicts that reach $10 million or more. These “nuclear verdicts” are becoming more common in certain states, driving up liability insurance rates and making coverage harder to maintain. The broader trend of social inflation is fueling these increases.

Several factors are contributing to this shift, including the rise of third‑party litigation funding, younger jurors who tend to view corporations more skeptically, and legal strategies designed to evoke stronger emotional responses in court. Industries such as healthcare, transportation, and manufacturing are under significant financial strain as a result.

To get ahead of the issue, insurers are experimenting with artificial intelligence to assess claims risk, and lawmakers in some regions are exploring reforms to curb excessive jury payouts. Even so, social inflation remains one of the highest and most unpredictable costs businesses must anticipate in 2026.

2. AI‑Enhanced Cyber Threats and Expanding Digital Risks

Cybercriminals are becoming more sophisticated, leveraging artificial intelligence and subscription‑based ransomware tools to target businesses with precision. These attacks can expose confidential information, force system shutdowns, and inflict serious reputational harm.

A digital breach can result in major financial consequences—from operational downtime to regulatory penalties. To stay protected, companies need layered security measures, including multi‑factor authentication, threat‑detection tools, employee cybersecurity training, and consistent software patching.

Cyber insurance continues to play a critical role, but carriers are now enforcing stricter requirements before granting or renewing policies. Strong cybersecurity practices and insurance coverage now function together as essential components of risk prevention.

3. Climate‑Driven Disasters and Property Insurance Challenges

Extreme weather events—wildfires, flooding, hurricanes, and more—are becoming both more frequent and more severe. As the risk climbs, businesses in vulnerable areas are struggling to secure property insurance or facing skyrocketing premium costs. In some regions, certain insurers have reduced coverage availability or exited markets entirely.

In response, many organizations are reinforcing buildings with resilient materials and designs that can better withstand environmental threats. Others are turning to parametric insurance, which provides payouts based on specific triggers, such as storm intensity or rainfall totals. This model allows for quicker recovery after severe events.

Climate‑related preparedness is no longer optional; it’s a fundamental part of business continuity planning in 2026.

4. Supply Chain Instability and Business Interruption Risks

Global supply chains continue to feel the strain of transportation delays, material shortages, geopolitical tensions, and labor disruptions. Even if a company is not directly harmed, issues within a supplier’s operations can create costly interruptions.

To manage these uncertainties, businesses are increasingly turning to insurance solutions designed specifically for supply chain exposure. Coverage options may include protection against disruptions caused by shipping issues, supplier failures, or even cyber incidents that hit logistics partners.

Having these safeguards in place helps ensure day‑to‑day operations remain stable even when external challenges arise.

5. Rising Compliance Demands and Regulatory Pressure

Regulatory expectations are evolving quickly, especially in areas such as environmental accountability, consumer data protection, and corporate transparency. Falling behind on new requirements can expose businesses to legal complications and added expenses.

Legislation like the California Consumer Privacy Act (CCPA) has raised the bar for data handling standards in the U.S., while new policies in Europe are making it easier for consumers to pursue legal claims. Meanwhile, insurers must meet heightened regulatory scrutiny themselves—which can influence how policies are underwritten or priced.

Because of this, companies should make a habit of reviewing their insurance policies regularly to avoid unexpected exclusions or gaps created by shifting regulatory landscapes.

6. Technology‑Driven Operational Failures

Digital transformation is reshaping operations across nearly every industry. Automation, AI systems, and cloud platforms deliver convenience and speed—but they also introduce new forms of risk. A malfunctioning algorithm, software outage, or system misconfiguration can halt operations or produce costly errors.

Insurance products designed to address technology‑related failures are becoming more common. Still, coverage alone isn’t enough. Organizations must actively monitor their digital tools, update systems consistently, and ensure that emerging technologies are implemented responsibly and securely.

With the right mix of insurance protection and strong digital governance practices, businesses can reduce the likelihood of operational breakdowns.

Preparing for 2026 and Beyond

The challenges businesses face this year are interconnected, meaning one issue can quickly trigger another. Taking a strategic approach to risk management—paired with regular insurance policy evaluations—can help organizations stay protected as the landscape continues to evolve.

If you’d like help reviewing your coverage or identifying vulnerabilities, reach out to schedule a customized risk assessment tailored to your business.