As 2026 gets underway, companies are stepping into a landscape filled with fast‑moving risks and growing uncertainty. From shifting legal trends to increasingly sophisticated cyberattacks, today’s challenges require businesses to think ahead and strengthen their protection strategies. Having the right insurance and risk management practices in place can make a significant difference in staying resilient throughout the year.

Below are six major risks that organizations should keep on their radar as they plan for the months ahead.

1. Escalating Social Inflation and Large Jury Awards

High-dollar jury awards—often referred to as nuclear verdicts—are becoming more frequent across several states. Verdicts exceeding $10 million are putting pressure on liability insurance markets, driving premiums upward and making coverage harder for many businesses to secure. This ongoing trend, known as social inflation, is being fueled by third-party litigation funding, shifting attitudes among younger jurors, and emotional legal strategies aimed at increasing settlements.

Industries such as healthcare, manufacturing, and automotive are feeling the effects most intensely. Some insurers are turning to artificial intelligence to better forecast litigation exposure, while lawmakers in certain states are considering reforms aimed at curbing extreme verdicts. Even with these developments, social inflation continues to be one of the most unpredictable—and expensive—risks heading into 2026.

2. Increasing Cyber Threats Driven by Advanced Technology

Cybercriminals are becoming more organized, and their tactics more complex. The rise of ransomware-as-a-service, combined with the rapid evolution of artificial intelligence tools, is enabling attackers to infiltrate systems, steal sensitive information, shut down networks, and damage brand reputation. Recovering from a single breach can cost businesses significant time and money, not to mention regulatory penalties and legal concerns.

To manage this growing threat, companies need multilayered cybersecurity defenses. This includes multi-factor authentication, real-time threat detection tools, routine employee training, and consistent system updates. Cyber insurance remains an essential safeguard, but most insurers now require companies to meet strict security requirements in order to qualify for coverage. Today, cybersecurity readiness and insurance eligibility are tightly connected.

3. Climate-Related Disasters and Rising Property Losses

Extreme weather events—including floods, hurricanes, wildfires, and severe storms—continue to increase in both frequency and intensity. These shifts are driving higher property losses and making insurance availability more challenging, especially in regions that face ongoing environmental risks. In some areas, insurers are even reducing coverage offerings or leaving certain markets altogether.

To counter these challenges, many companies are turning to stronger building materials, enhanced structural designs, and improved fire- and weather-resistant systems. Some businesses are also exploring parametric insurance options, which offer payouts based on specific measurable conditions—such as wind speed or rainfall totals—rather than waiting for traditional claims assessments. Preparing for climate impacts is quickly becoming a core part of long-term business planning.

4. Ongoing Supply Chain Strain and Operational Interruptions

Global supply chains remain vulnerable to disruption, whether from transportation delays, material shortages, geopolitical tensions, or issues within a company’s own supplier network. Even businesses unaffected directly can experience production slowdowns or revenue losses if a key supplier encounters problems.

To strengthen resilience, many organizations are investing in insurance designed to address supply chain interruptions. These policies can offer protection when critical vendors or transportation routes are compromised, or when cyber incidents affect logistics partners. With interconnected supply networks, having the right insurance support can help keep operations steady when external issues arise.

5. Rapid Shifts in Regulatory Requirements

Rules governing data privacy, environmental responsibilities, sustainability reporting, and other compliance areas are evolving quickly. These changes introduce new financial and legal exposures for companies that do not stay ahead of emerging standards.

Regulations such as the California Consumer Privacy Act (CCPA) are prompting businesses to strengthen how they collect, store, and manage consumer data. In Europe, more consumer‑friendly legal structures are making it easier for individuals to take action against companies. Insurers themselves are navigating stricter oversight, which may influence how policies are written or what exclusions may apply. With so many moving parts, businesses benefit from reviewing their insurance policies regularly to ensure they remain aligned with current laws.

6. Technology-Related Failures and Operational Risks

As businesses rely more heavily on automation, cloud platforms, and artificial intelligence, new vulnerabilities continue to appear. A system outage, software malfunction, or flawed AI decision can create operational delays, data issues, or legal complications. Reliance on technology offers efficiency but also expands the potential for costly disruptions.

Some insurers now provide dedicated coverage for technology breakdowns or system failures. However, businesses must still take steps internally—such as securing digital tools, scheduling routine maintenance, and ensuring responsible use of emerging technologies—to minimize risk. Combining thoughtful digital oversight with tailored insurance protection can help avoid major setbacks.

Preparing for a Complex Year Ahead

The challenges businesses face in 2026 are deeply interconnected, and one disruption can quickly trigger others. Staying informed, adjusting risk management strategies, and reviewing coverage regularly can help organizations stay ahead of emerging threats and protect long-term stability.

If you need guidance reviewing your insurance coverage or want help identifying potential gaps, our team is here to assist. Reach out anytime to schedule a personalized risk review for your business.