6 Key Insurance Risks Businesses Should Prepare for in 2026

As 2026 begins, businesses face an increasingly uncertain risk environment. Legal pressures, cyber threats, and climate-driven losses are evolving rapidly, making proactive planning and well-aligned insurance coverage more important than ever. Below are six key risks businesses should monitor this year.

 

1. Social Inflation and Nuclear Verdicts
Large jury awards—often exceeding $10 million—are becoming more common, driving higher liability premiums and tighter underwriting. Known as social inflation, this trend is fueled by litigation funding, shifting juror attitudes, and aggressive courtroom strategies. Healthcare, automotive, and manufacturing sectors are especially impacted, and despite insurer use of AI and potential legislative reform, unpredictability remains a major concern.

2. Rising Cyber Threats and AI-Driven Attacks
Cyberattacks continue to grow in sophistication, with ransomware-as-a-service and AI-powered intrusions increasing financial and operational risk. Strong cybersecurity controls—such as multi-factor authentication, employee training, and continuous monitoring—are essential, as cyber insurance increasingly requires strict security standards.

3. Climate Risk and Natural Disaster Losses
Floods, wildfires, and severe storms are occurring more frequently, pushing property insurance costs higher and limiting coverage in high-risk areas. Businesses are responding through property hardening and alternative solutions like parametric insurance, which enables faster recovery after qualifying events.

4. Supply Chain Disruptions and Business Interruption
Ongoing global disruptions—from geopolitical tensions to logistics failures—continue to impact operations. Many companies are expanding coverage to address supplier failures, trade interruptions, and cyber-related disruptions within their supply chains.

5. Regulatory Changes and Legal Complexity
Evolving regulations around data privacy, environmental responsibility, and consumer protection are increasing compliance costs and legal exposure. Laws such as the CCPA and expanded European regulations make regular insurance reviews critical to avoid coverage gaps.

6. Technology-Related Operational Risks
Greater reliance on automation, AI, and cloud systems introduces new vulnerabilities, including outages and system errors. Specialized insurance products can help, but strong oversight, maintenance, and responsible use of technology remain essential.

 

Preparing for 2026
Many of today’s risks are interconnected, requiring a thoughtful and forward-looking approach. Regular insurance reviews and updated risk strategies can help keep your business resilient. If you’d like help identifying potential coverage gaps, contact us to schedule a tailored risk assessment.