As 2026 gets underway, companies across every industry are navigating a fast-changing landscape of emerging threats. From legal challenges to severe weather, the risks facing today’s businesses are becoming more complex and more costly. Staying protected requires thoughtful planning, updated coverage, and a clear understanding of what’s ahead.
Below are six major risks businesses should keep on their radar this year.
1. Rising Social Inflation and Expanding Nuclear Verdicts
Jury awards topping $10 million—commonly called nuclear verdicts—continue to increase and are putting pressure on liability insurance pricing. These large payouts are tied to a broader trend known as social inflation, driven by third-party financing of lawsuits, shifting attitudes among younger jurors, and emotionally charged courtroom strategies.
Industries such as healthcare, manufacturing, and automotive are experiencing the steepest impact. While some insurers are turning to artificial intelligence to better forecast litigation outcomes, and certain states are weighing reforms to limit excessive awards, the trend remains costly and unpredictable. For many businesses, this is one of the most financially challenging risks of 2026.
2. Increasing Cyber Threats and AI-Driven Attacks
Cybercriminals are becoming more sophisticated, often using AI tools and ransomware-as-a-service platforms to breach systems, steal sensitive information, and halt operations. These incidents can lead to major financial losses, legal complications, and reputational damage.
Stronger cybersecurity protections are essential. Businesses should implement multi-factor authentication, real-time threat monitoring tools, regular employee training, and diligent software maintenance. Cyber insurance also plays an important role, though most policies require companies to meet specific security standards before coverage applies. Prevention and compliance are now inseparable parts of cyber risk management.
3. Climate-Related Disasters and Property Insurance Challenges
Hurricanes, floods, and wildfires are occurring more frequently and causing larger losses than in previous years. As a result, it’s becoming more difficult—and more expensive—for businesses in high-risk regions to secure or maintain property insurance. Some insurers are even withdrawing from markets where losses have become unsustainable.
To mitigate risk, many companies are investing in more resilient building materials and upgrading their facilities to better withstand extreme weather. Others are turning to innovative insurance options that issue payments based on clear triggers like rainfall totals or wind speeds, allowing for quicker recovery without lengthy claims processes. As climate volatility grows, proactive planning is essential for long-term resilience.
4. Ongoing Supply Chain Challenges and Operational Interruptions
Global supply chains remain fragile. Delays at ports, shortages of critical materials, political tensions, and transportation bottlenecks can interrupt production and delivery timelines. Even when a business isn’t directly affected, disruptions impacting a supplier can cause expensive downtime.
To address this, many organizations are expanding their coverage with policies designed to protect against supplier failures, transportation breakdowns, or cyber incidents affecting logistics partners. These specialized protections help companies stay operational even when the unexpected occurs elsewhere in the supply chain.
5. Rapid Regulatory Changes and Legal Compliance Pressures
New regulations—particularly around data privacy, sustainability, and environmental impact—are creating added pressure for businesses to stay compliant. Laws such as the California Consumer Privacy Act (CCPA), along with evolving rules in Europe, are increasing penalties for noncompliance and making it easier for consumers to pursue legal action.
Insurers are also navigating stricter requirements, which can influence how policies are structured. To avoid coverage gaps or hidden exclusions tied to regulatory updates, businesses should routinely review their insurance policies and ensure they align with the latest legal expectations.
6. Technology-Related Operational Risks
As more companies rely on artificial intelligence, automation, and cloud-based tools, new vulnerabilities are emerging. Technology failures, system outages, or incorrect decisions generated by AI can disrupt operations, lead to financial losses, or create compliance issues.
Some insurers now offer coverage specifically tailored to technology breakdowns or digital disruptions. Still, businesses must take steps to safeguard their systems by keeping software updated, monitoring digital tools, and ensuring responsible use of emerging technologies. Strong digital management combined with appropriate insurance helps reduce the likelihood of costly tech failures.
As 2026 unfolds, the risks facing businesses are increasingly interconnected—meaning one issue can quickly trigger another. Staying informed, updating your coverage, and reassessing risk management strategies can help keep your organization prepared and protected.
If you’d like support reviewing your policies or identifying areas where additional protection may be needed, give us a call to schedule a custom risk assessment tailored to your business.
