Business Leaders Face Major Blindspot on Risks That Could End Their Companies

While U.S. business leaders enter 2026 with broad optimism about their companies’ prospects, there is a gap between the threats they worry about most and the ones that could force their companies to close permanently, according to Sentry Insurance’s 2026 C-Suite Stress Index Report.

Most leaders have a positive outlook — 54% of respondents said they are optimistic their business will thrive in 2026 — but they acknowledge there are risks lurking beneath the surface, the Sentry survey found.

Lawsuits represent a clear and present danger to U.S. businesses, yet executives are largely overlooking them as a critical risk, the report said. The data paints a striking picture: 93% of executives have experienced company litigation within the past five years, and 69% acknowledge that a single multimillion-dollar verdict could end their business. Yet only 17% count lawsuits among their top threats heading into 2026.

This oversight carries real consequences, Sentry said. Nearly half of surveyed leaders have seen insurance premiums and legal costs climb as a direct result of litigation. Beyond the financial toll, lawsuits divert management attention — 42% report their leadership teams spending significant time addressing legal matters rather than running operations, with retail executives particularly affected at 51%.

Third-party litigation funding adds another layer of complexity. Two-thirds of executives view investor-financed litigation as a mounting concern in their industries, with long-haul trucking leaders expressing the most alarm. This trend suggests the litigation landscape will only grow more treacherous in coming years, the report said.

Weather’s Mounting Toll and Insurance Concerns

Severe weather and natural disasters tell a similar story of underestimation, according to Sentry. An overwhelming 92% of executives have experienced weather-related disruptions over the past five years, ranging from operational shutdowns to property damage. Half believe the next major weather event could force their company to close entirely. Yet only 32% cite natural catastrophes among their top five risks for 2026.

The operational impacts from severe weather are substantial. Forty-three percent of respondents have endured weather-related system outages in the past five years, while 40% faced supply chain delays. Property damage — affecting facilities, vehicles, and equipment — impacts 70% of companies. Perhaps most concerning, 84% of executives worry that property insurance will become harder to obtain in their regions, with nearly half of leaders in the Western U.S. expressing extreme concern.

This vulnerability is intensifying insurance coverage gaps, Sentry noted. Just 17% of executives feel their current policies are completely adequate. The disconnect between executives’ lived experience with weather events and their prioritization of natural catastrophes as a threat suggests many companies remain underprotected.

A Proactive Reassessment Underway

Despite these gaps, executives are taking action, according to the report. Nearly all surveyed leaders — 98% — plan to reevaluate their insurance policies in 2026, signaling a shift toward proactive risk management rather than reactive response.

Among the business leaders who expect their businesses to thrive this year, 53% anticipate expanding coverage, compared to just 3% planning reductions.

This momentum extends to workforce protection as well. Eighty-three percent of leaders plan to increase investments in worker safety, driven by concerns about rising health care costs and escalating workers’ compensation claims. Sixty-six percent have either witnessed or fear an influx of unskilled workers will generate more workplace injuries — a risk amplified in health care settings, where 63% of leaders worry additional demands on aging workers could trigger injury increases.

Vehicle risk management offers a bright spot in this landscape, Sentry said. Sixty-one percent of companies with vehicles have installed dash cams, with 69% using footage to improve driver behavior and reduce litigation exposure.

Obtain the full report here. &