As 2026 gets underway, companies are navigating a landscape filled with fast‑moving challenges and growing uncertainty. From shifting legal trends to increasingly sophisticated cyber threats, today’s business risks look very different from those of just a few years ago. Staying resilient requires proactive planning, smart risk management, and insurance coverage that evolves alongside these emerging threats.

Below are six major risks businesses should keep on their radar this year—and why preparation matters more than ever.

1. Escalating Social Inflation and Larger Jury Awards

Massive jury verdicts—often exceeding $10 million—are becoming more common and creating major pressure on liability insurance markets. These “nuclear verdicts” are driving up premiums and making coverage harder to secure, especially for industries that face higher litigation exposure.

Several forces are fueling this rise in social inflation. Litigation funding from third‑party investors is pushing more cases to trial. Younger jurors tend to be more skeptical of corporations. And emotionally charged courtroom strategies are persuading juries to award higher settlements. Sectors such as healthcare, automotive services, and manufacturing are feeling the effects most acutely.

While insurers are increasingly using artificial intelligence to better anticipate legal risks and some states are reconsidering tort reform laws, the overall trend shows no signs of slowing. Businesses should expect social inflation to remain one of the most unpredictable and costly risk factors of 2026.

2. More Complex Cyber Threats Fueled by Artificial Intelligence

Cyber criminals are becoming more advanced, using AI‑powered tools and ransomware‑as‑a‑service offerings to scale attacks faster than ever. These breaches can cripple operations, compromise sensitive data, damage a company’s reputation, and result in expensive fines or lawsuits.

Effective cyber defense today requires a mix of strong technology practices and ongoing employee awareness. Companies should lean on multi‑factor authentication, continuous threat‑detection tools, routine security training, and frequent patching of software systems. Cyber insurance can provide an additional layer of protection, but carriers now require strict security controls before offering or renewing policies. Prevention is no longer optional—it’s essential.

3. Climate‑Driven Disasters and Growing Property Losses

Severe weather events—including hurricanes, floods, wildfires, and windstorms—continue to increase in both frequency and intensity. As a result, businesses in high‑risk areas are facing shrinking insurance availability and skyrocketing premiums. In some regions, insurers have exited the market entirely, leaving companies with limited options.

To stay insurable and reduce potential losses, many organizations are fortifying their buildings with improved materials and resilient design features. Some are turning to parametric insurance, which pays out based on predefined triggers such as wind speed or rainfall levels instead of traditional loss assessments. This faster payout model helps businesses recover more quickly when disaster strikes. For long‑term security, preparing for climate‑related threats is no longer optional—it’s a core operational necessity.

4. Disruptions in Global Supply Chains

Supply chains remain fragile due to ongoing geopolitical tensions, transportation bottlenecks, material shortages, and shifting economic policies. Even companies that operate far from affected regions may experience interruptions if a key supplier encounters a shutdown or logistical challenge.

To help mitigate these ripple effects, more businesses are turning to specialized insurance solutions. These include policies that cover supply chain breakdowns, political instability, transit delays, and cyber incidents involving logistics partners. This type of coverage can be critical for maintaining steady operations when external events cause unexpected slowdowns.

5. Evolving Regulations and Increasing Legal Complexity

Regulatory landscapes across the world are shifting faster than many organizations can keep up with. New rules related to data privacy, sustainability reporting, environmental compliance, and consumer protections are raising compliance costs and legal exposure.

For example, laws like the California Consumer Privacy Act (CCPA) require more rigorous data management. Europe continues to strengthen consumer rights, making it easier for individuals to take legal action against companies. Insurance carriers are also adapting to their own regulatory pressures, which can impact the terms and exclusions within the policies they provide.

To avoid surprises, businesses should regularly review their insurance programs to make sure emerging regulations aren’t creating gaps in protection. Staying ahead of legal changes can prevent costly penalties down the line.

6. Technology‑Related Operational Breakdowns

Companies are embracing digital tools—including automation platforms, cloud systems, and artificial intelligence—to improve efficiency and reduce costs. But the more businesses rely on technology, the greater their exposure when something goes wrong. Even a single technical glitch or a flawed AI decision can trigger downtime, operational disruptions, or liability concerns.

Some insurers now offer policies designed specifically for technology‑driven risks, covering outages, system failures, and tech‑related business interruptions. Still, organizations must take responsibility for maintaining secure, up‑to‑date systems and adopting thoughtful governance practices around AI and automation. Combining strong digital oversight with the right insurance coverage can help prevent tech issues from turning into major setbacks.

Preparing for a Connected Risk Environment in 2026

The challenges businesses face in 2026 don’t exist in isolation—one event can easily influence another. A cyber incident can disrupt supply chains. A regulatory violation can lead to costly legal action. A natural disaster can trigger financial strain that affects long‑term operations.

Because these risks are interconnected, planning ahead is essential. Conducting regular insurance reviews, updating risk management strategies, and staying informed about emerging trends can give businesses the resilience they need to navigate uncertainty with confidence.

If you’d like support reviewing your coverage or identifying potential gaps, reach out to us. We’re here to help you build a tailored risk strategy that aligns with your unique industry and goals.