Social media lawsuits surge, lifting insurers’ liability exposure

Insurers may need to revisit policy wording and tighten risk selection.

Insurers this 2026 will likely face new emerging risks, such as rising exposures linked to social media, space activity, sanctions, nuclear technology, litigation funding and head office liability, according to Clyde & Co.

Clyde & Co says these shifting risks will influence insurance portfolios and underwriting strategies in 2026 as insurers adapt to new forms of technological, regulatory and geopolitical exposure.

The law firm’s forecast draws on insights from its global partners and points to new areas of liability and regulatory scrutiny that insurers will need to monitor closely over the next year.

One of the fastest-growing concerns is social media addiction. 

Clyde & Co says lawsuits in the US claiming that platforms are designed to encourage addictive behaviour amongst children are increasing insurers’ product liability exposure. 

Some jurisdictions have already introduced warning labels, and the firm warns that similar claims could spread to other markets. 

Insurers may need to revisit policy wording and tighten risk selection to manage the rising volume of mental-health-related claims.

Space-related risks are also expanding as commercial activity accelerates. 

Kevin Sutherland, the firm’s global head of aviation, said insurers are dealing with limited actuarial data, uncertain legal frameworks and the possibility of large losses linked to satellite failures, debris or cyberattacks. 

Demand for satellite broadband, earth observation and space tourism is expected to push the need for new insurance solutions in 2026.

Governments’ plans to scale up next-generation nuclear projects are another area of concern. 

Clyde & Co notes that insurers will have to underwrite more complex risks as new nuclear technologies roll out. This includes a focus on specialised coverage and stronger cyber protections for operators.

Sanctions exposure remains high, particularly in the marine and energy sectors. 

With new sanctions packages being announced, Clyde & Co says the extra-territorial nature of these rules is creating operational and claims challenges for insurers in Asia and other regions. 

Firms are being advised to step up monitoring and compliance efforts to avoid breaches.

Head office liability is becoming more prominent as claimants attempt to hold parent companies directly responsible for the actions of subsidiaries abroad. 

Clyde & Co says this exposes insurers to higher risks under D&O and corporate liability policies, especially as courts in some jurisdictions increasingly allow claims to bypass traditional corporate structures.

Litigation funding also presents risks. 

The firm points to inconsistent disclosure rules across markets, which may create conflicts of interest and complicate multi-jurisdictional cases.

Insurers could face greater liability exposure and are encouraged to review policy wording for funded claims.