As 2026 gets underway, companies are stepping into a landscape filled with fast‑moving threats and evolving uncertainties. Major lawsuits, advanced cyberattacks, and climate‑driven losses are becoming more common, forcing business leaders to rethink how they protect their operations. Staying informed and maintaining strong insurance coverage can make a meaningful difference when unexpected challenges arise.

Below are six emerging risks that organizations should keep top of mind this year.

1. Social Inflation and Increasing Nuclear Verdicts

Large jury awards—often exceeding $10 million—are becoming more frequent, especially in certain regions. These massive payouts, commonly referred to as nuclear verdicts, are pushing liability insurance premiums higher and making it harder for businesses to secure affordable coverage. The rise of social inflation, driven by third‑party litigation funding, shifting attitudes among younger jurors, and emotionally charged courtroom strategies, is fueling this trend.

Sectors like healthcare, automotive, and manufacturing are feeling the greatest impact as legal costs continue to climb. To help navigate these challenges, some insurers are turning to artificial intelligence to forecast claim outcomes and manage exposure. Meanwhile, several states are exploring reforms to limit excessive awards. Even with these measures, social inflation remains a costly and unpredictable issue for businesses in 2026.

2. Cybersecurity Threats and AI‑Enhanced Attacks

Cybercriminals are using more sophisticated methods than ever to breach systems and exploit vulnerabilities. Tools such as ransomware-as-a-service and AI‑powered attack programs allow threat actors to steal sensitive information, cripple operations, and damage a company’s reputation with alarming speed. The financial toll of a cyber incident—from downtime to regulatory fines—can be significant.

To stay protected, organizations need layered and proactive cybersecurity strategies. This includes multi‑factor authentication, real‑time threat detection, consistent employee training, and timely software updates. Cyber insurance plays an essential role as well, but insurers increasingly require businesses to meet strict security standards before offering coverage. Strong prevention measures and insurance now function as complementary pillars of cyber resilience.

3. Natural Catastrophes and Climate‑Related Losses

Extreme weather events—such as hurricanes, wildfires, and flooding—continue to intensify, resulting in widespread property damage and escalating recovery costs. For companies operating in high‑risk regions, securing or renewing property insurance has become more difficult and often more expensive. In some areas, insurers are withdrawing altogether, leaving businesses with fewer options.

To better prepare, many organizations are investing in upgraded construction materials, resilient building designs, and prevention-focused renovations. Others are turning to parametric insurance, which pays out based on predetermined conditions like wind speed or rainfall totals, allowing faster access to recovery funds. Planning for climate‑driven disruptions has shifted from a recommendation to a necessity for long-term operational stability.

4. Supply Chain Instability and Business Interruption

Global supply chains remain vulnerable to a range of disruptions. Delays at shipping hubs, shortages of raw materials, geopolitical conflicts, and other external pressures can hinder production even when a company’s own operations are running smoothly. A single supplier setback can create ripple effects that lead to costly interruptions.

To manage these uncertainties, more businesses are adopting specialized insurance designed to cover losses when critical suppliers or transportation channels encounter problems. Coverage options now include protection for supply chain breakdowns, trade and transport disruptions, and cyber incidents affecting logistics partners. These policies help keep businesses operational when unpredictable events interrupt the flow of goods and materials.

5. Evolving Regulations and Rising Compliance Demands

The regulatory environment continues to change rapidly, particularly around data privacy, environmental impacts, and corporate sustainability reporting. New rules introduce added financial and legal responsibilities for businesses, particularly those that fail to stay ahead of compliance updates.

Policies like the California Consumer Privacy Act (CCPA) are prompting companies to strengthen their data management practices, while European regulations continue to expand consumers’ legal rights. Insurers are also adapting to stricter oversight, which may influence how policies are written and what exclusions they include. Regular insurance reviews are essential to ensure no hidden gaps exist due to shifting legal standards.

6. Technology‑Driven Operational Risks

Organizations are relying more heavily on artificial intelligence, automation, and cloud‑based tools to streamline workflows. While these technologies boost efficiency, they also introduce new vulnerabilities. System outages, software errors, and flawed AI decisions can quickly disrupt operations or create liability concerns.

To support businesses navigating these risks, some insurers now provide coverage specifically for technology failures and digital‑related disruptions. Still, businesses remain responsible for maintaining secure systems, performing regular updates, and managing digital tools responsibly. A strong combination of solid tech governance and the right insurance coverage can help minimize costly interruptions.

Staying Prepared for 2026

The risks shaping 2026 are closely interconnected, and an issue in one area can easily trigger challenges in another. For this reason, it’s more important than ever for businesses to stay proactive. Conducting regular insurance reviews, strengthening risk management strategies, and staying informed about new threats can help protect your business and keep operations running smoothly.

If you’re looking for guidance in evaluating your coverage or identifying potential vulnerabilities, our team is here to help. Reach out to schedule a personalized risk review tailored to your organization’s needs.