Emerging risks insurers are watching in 2026

An emerging risk is a hazard whose losses, legal rules or pricing have not settled, so insurers do not yet know how to write it. The usual market response comes in a predictable order: the exposure sits quietly inside existing policies, claims arrive, carriers add exclusions or sublimits, and later a few markets sell affirmative cover. As of October 2026 the risks furthest along that path for U.S. businesses are artificial intelligence, systemic cyber events, PFAS chemicals, litigation costs, weather that is not a hurricane, heat, and the terrorism backstop. This guide covers what each looks like in policy terms and what to do at renewal.

How an emerging risk turns into an exclusion

The cycle has stages, and knowing where a risk sits tells you what to expect from your carrier.

1. Silent coverage. The policy says nothing, so an argument for coverage exists. Insurers call this "silent AI" today, as they once called it "silent cyber."
2. First claims and lawsuits. Losses prove the exposure is real and tell underwriters what a claim costs.
3. Exclusion or sublimit. Carriers add an exclusion by endorsement, or cap the cover with a sublimit. This is where AI and PFAS are now.
4. Affirmative product. Specialty markets sell cover that names the risk, with its own limits, retention and conditions.
5. Standardization. Forms settle, price stabilizes, and the topic stops being "emerging."

Policies are read as written, so what you were buying last year and what you are buying now can differ by a single endorsement. That is why the endorsement schedule deserves more attention than the premium page. Your own broker, not this guide, can tell you which stage your carriers are at; forms and appetites differ.

What risk managers say is coming

The Allianz Risk Barometer 2026, a survey of 3,338 risk professionals in 97 countries and territories taken in October and November 2025, ranked the top global business risks this way:

Allianz gives percentages in text only for the first three (Allianz Commercial). The survey measures concern, not loss, and it is global, but the direction matters: AI went from tenth to second in a single year.

The risks, one at a time

Artificial intelligence. Verisk's optional ISO exclusions for generative AI (CG 40 47, CG 40 48, CG 35 08, January 2026 edition) had produced 2,369 filing records across 49 states by September 2026, according to Insurance Business. Separately, the FBI's Internet Crime Complaint Center counted 22,364 AI-related complaints with $893 million in reported losses for 2025. Detail is in AI liability insurance: how insurers are treating artificial intelligence risk and Deepfakes and AI-driven fraud: what cyber and crime policies cover.

Systemic cyber. A single failure at a cloud or software provider can hit thousands of insureds at once, which breaks the diversification insurance relies on. CyberCube estimated insured losses from the October 20, 2025 AWS outage at $38 million to $581 million, and from the July 2024 CrowdStrike outage at $400 million to $1.5 billion; the width of those ranges shows how little the market can measure these events. See systemic cyber risk and cyber catastrophe bonds.

PFAS. Carriers now add PFAS endorsements to general liability, umbrella and pollution forms, and EPA's May 18, 2026 proposals would keep PFOA and PFOS drinking water limits but rescind others. The lawsuits continue regardless. See PFAS "forever chemicals" and liability insurance: exclusions and gaps.

Litigation costs. Marathon Strategies counted 190 verdicts of $10 million or more against companies in 2025, up 40.7% from 135 in 2024, totaling over $25.6 billion (report). Insurers call the drivers social inflation; the verdicts themselves are nuclear verdicts. Funding of lawsuits by outside investors adds a further question; see third-party litigation funding and liability insurance. Marsh's Global Insurance Market Index put U.S. casualty rates up 7% in the second quarter of 2026, even as property rates fell.

Weather that is not a hurricane. Swiss Re Institute estimated 2025 global insured natural catastrophe losses at about $107 billion, the sixth straight year above $100 billion, with the United States at about $89 billion and secondary perils (wildfire, severe convective storm, flood) a record 92% of the total. Severe convective storms alone were around $50 billion, and the Los Angeles fires about $40 billion (Swiss Re). See secondary perils: the storms, floods and fires that are not hurricanes. Where a catastrophe model is thin, expect higher deductibles rather than higher limits.

Heat. OSHA's proposed heat injury and illness prevention rule, published August 30, 2024, is still a proposal. The agency held hearings from June 16 to July 2, 2025, and its post-hearing comment period closed October 30, 2025, with no final rule as of October 2026 (OSHA). Employers still face the General Duty Clause and state heat rules, and heat is a workers' compensation and productivity cost either way; see heat illness, workplace heat rules and workers' comp.

Terrorism and political violence. The federal Terrorism Risk Insurance Program is authorized through December 31, 2027. The House passed H.R. 7128 on June 29, 2026 and the Senate passed S. 4395 by unanimous consent on September 28, 2026; both bills extend the program to 2034, but neither was law as of October 10, 2026 (Insurance Journal, September 29, 2026). See Terrorism insurance and TRIA: how the federal backstop works.

Where each risk lands in your program

A one-hour annual review

Say a 45-person food manufacturer in Texas wants to do this before its next renewal. A workable process:

1. Start with your how to build a risk register. Add one line per risk above that plausibly touches the business.
2. Ask the broker for all endorsements added or changed at the last renewal, and for the carrier's plans for the next one.
3. Compare the table above with the schedule and mark each risk as covered, excluded, sublimited or unknown.
4. For "unknown," ask the carrier in writing. Do not rely on a verbal assurance.
5. Decide what you retain, transfer or avoid. A risk you cannot insure may still be reducible, such as a supplier certification, a heat plan or a second cloud region.
6. Put the open items on the next management agenda, as part of Enterprise risk management (ERM) explained.

What this does not tell you

A list of risks is not a forecast. Many items here will look different within 12 months: the EPA rule, the TRIA bills, the NFIP's December 11, 2026 authorization date (see NFIP reauthorization and what it means for business flood cover) and the OSHA heat rule are all unresolved. Exclusion wording changes by carrier. If a specific coverage decision depends on one of these, ask a licensed broker or coverage attorney for the wording rather than for the trend.

Key takeaways

• Emerging risks usually move from silent coverage to exclusion to affirmative product; check the endorsement schedule, not just the premium.
• The Allianz Risk Barometer 2026 ranks cyber (42%), AI (32%) and business interruption (29%) as the top three global concerns, with AI up from tenth.
• Systemic cyber events, PFAS, litigation costs and secondary perils are already priced into policy terms through exclusions, sublimits and deductibles.
• Several rules remain unsettled in October 2026: EPA's PFAS proposals, OSHA's heat rule, TRIA reauthorization and NFIP authorization.
• A yearly one-hour review with your broker beats a one-time project.