Ninety-three percent of executives have seen their companies impacted by lawsuits in the past five years, yet only 17% include lawsuits among their top risks heading into 2026, according to Sentry’s 2026 C-Suite Stress Index. This indicates a “significant disconnect between the risks leaders worry about most and the ones that could put their companies out of business in a single event,” Sentry says.
Executives are instead prioritizing more immediate concerns, such as supply chain or logistics challenges (45%), economic pressures (44%), and tariffs and trade uncertainty (39%).
Underestimating the Impacts of the Largest Threat
Sixty-nine percent of executives believe that a single multimillion-dollar verdict would likely put their company out of business; 67% view recent increases in litigation and multimillion-dollar verdicts as a growing problem in their industry; and 66% feel the recent increase in third-party litigation funding is a problem in their industry.
The report warns that these risks share an alarming worst-case outcome: a single event capable of putting a company out of business. “Leaders are aware of these threats, yet they run the risk of downplaying them in favor of more immediate concerns.”
The consequences of litigation are highly disruptive, with almost 50% of executives reporting higher insurance premiums or rising legal costs directly related to it. According to the report, “Beyond the financial toll, lawsuits often pull leadership away from day-to-day operations: 42% report their management team’s attention being diverted to legal matters—including 51% in retail; more than a third (37%) have had to hire additional employees to manage litigation demands.”
Weather and Nat Cat Risks
Ninety-two percent of executives have experienced a weather-related disruption in the past five years, and half believe the next major weather event or natural catastrophe could force their company to close entirely. Yet only 32% cite natural catastrophes among their top threats for 2026, according to the survey, echoing the same sort of disconnect shown when it comes to litigation.
As weather-related disruptions increase in both frequency and severity, it is crucial for executives to prepare for the worst-case scenario. “Over the past five years, 43% of executives—including 53% of the retail sector—report that weather-related outages left their company systems temporarily unable to operate. Supply chain delays were nearly as common, affecting 40% of companies overall and 50% of businesses with more than 1,000 employees.”
Meanwhile, 70% of companies have experienced property damage due to severe weather, including 34% to facilities, 34% to vehicles, and 33% to equipment. These losses, when paired with operational shutdowns, supply chain disruptions, and the potential inability to secure property insurance, can be devastatingly costly. “The vast majority (84%) of executives are concerned that property insurance will become harder to obtain in the places they operate.”
Workforce Strain
“Two-thirds of executives (66%) have either already seen an influx of unskilled or under-skilled workers lead to more claims, or are concerned it will happen soon. In addition, nearly all executives (97%) are feeling the impact of an older population and shifting retirement age. Together, these shifts are forcing companies to do more with fewer—and often less experienced—workers.”
Forty-six percent of executives report that more of their employees are working until they are older and large groups of employees leave at once as they reach retirement age. Meanwhile, the labor pool continues to shrink, and the effects are being felt, respondents indicated.
As a result of these workforce changes, businesses are seeing higher healthcare expenses (46%), and nearly half (49%) fear injuries will rise as their companies push for higher output. Further, 44% acknowledge their employees are being asked to perform tasks they are not fully trained for—particularly in retail—where 53% of executives see workers being placed in higher-risk situations due to training gaps, increasing the chances of injury.
Overall, 84% of businesses are asking employees to perform tasks outside their roles, above their level, or that they have not been trained for, putting them at risk for injury. Nearly one in five executives (18%) have already experienced higher workers’ compensation losses related to unskilled or under-skilled workers. “Among companies with $50 million or more in revenue, that figure rises to 28%.” Meanwhile, 51% of executives are calling on employees to work longer hours or take fewer breaks.
Notably, “Executives who fear their businesses may shrink or close in 2026 are more than twice as likely to already be seeing rising workers’ compensation losses stemming from unskilled or under-skilled workers (30%) compared with those who expect their businesses to thrive (14%).” In response, leaders are planning to invest in protecting their workers. “The vast majority of executives (83%) plan to increase spending on worker safety. And while protecting their employees is the priority, executives believe these investments will also support their broader business goals.”
Disconnect Between Risk Exposure and Insurance Coverage
Only 17% of executives are fully confident their insurance coverage is adequate, according to the report. Nearly four in 10 executives acknowledge coverage shortfalls they plan to address, as well as changes to their businesses or operating environments that have outpaced their existing policies. Forty-seven percent need to increase coverage as their business expands; 43% look to lower their overall risk; and 36% report seeing new kinds of natural disasters in their area and want to ensure their companies are protected against those emerging risks.
“Nearly all leaders (98%) plan to reevaluate their insurance policies in 2026—including those who think their coverage is completely adequate, but who may look to shed unnecessary coverage or simply to ensure all is in order,” Sentry notes.
Industry Outlook: Cautious Optimism
“Confidence is especially strong among leaders in the retail and long-haul trucking spaces, where 60% of leaders in these industries expect to thrive in 2026,” states Sentry. “At the same time, executives in manufacturing are more likely than others (30%) to worry that their businesses could shrink or even go out of business this year.”
Overall, the numbers show that 54% of companies expect to not only survive, but thrive; 22% expect their company to remain stable, though they don’t expect growth; 19% expect to shrink; and 5% worry 2026 may be the year their company goes out of business.