HUB International Report Highlights Risk Fatigue and Insurance Coverage Gaps

Business leaders are facing a growing range of interconnected risks while reporting limited confidence in their insurance protection, according to HUB International's 2026 Middle Market Profitability & Resiliency Report, titled "The Cost of Risk Fatigue: A Threat to Profitability and Resilience." The report examines how competing business risks, uncertainty and gaps in insurance understanding are affecting organizations' ability to make decisions and maintain long-term resilience.

The report draws on HUB International's 2026 Middle Market Profitability & Resiliency Executive Survey, which gathered responses from senior business leaders across North America. Participating organizations represented multiple industries, with most reporting annual revenue of more than $150 million and less than $1 billion.

Business Risks Become More Interconnected

Cybersecurity, rising operating and labor costs, artificial intelligence (AI) adoption, and macroeconomic pressures rank among the leading risks affecting profitability. According to HUB International, concerns are now distributed more evenly across multiple exposures rather than concentrated among a few dominant risks, making it more difficult for organizations to determine where to focus their resources.

The report notes that a single event can create operational, financial, and reputational consequences across an organization. These interconnected exposures complicate risk prioritization and require businesses to consider how multiple threats could affect profitability simultaneously.

Risk Fatigue and Declining Confidence

HUB International identifies risk fatigue as a growing challenge for organizations facing prolonged uncertainty. The report describes risk fatigue as repeated exposure to warnings and high-stress situations that can reduce confidence and responsiveness, potentially delaying decisions about risk management and insurance.

Only 16 percent of organizations reported confidence in their current insurance position, even as fewer organizations explored new ways to use insurance compared with the previous year. According to HUB International, this disconnect illustrates how uncertainty about which risks to prioritize can slow efforts to address exposures.

Enterprise Risk Management Programs Continue to Develop

Organizations are making progress in formalizing their risk management practices, with 75 percent reporting that they have an enterprise risk management (ERM) program, an increase of 14 percentage points from the previous year. However, only 37 percent of leaders described having a mature, holistic approach supported by strategic information sharing, according to HUB International.

The report found that 67 percent of organizations were classified at an intermediate level of risk maturity in 2026, while only 9 percent had achieved advanced maturity. Although more organizations are establishing formal risk management structures, HUB International noted that risk information often remains concentrated within individual teams rather than being incorporated into broader organizational decisions.

According to the report, relatively few organizations consistently integrate past, current, and future risks into decision-making or establish shared accountability for risk management across their workforce. These findings highlight the difference between maintaining formal risk management processes and using those processes to guide business strategy.

Insurance Coverage Understanding Remains Limited

One of the report's most significant findings involves organizations' understanding of their existing insurance programs. According to HUB International, 75 percent of leaders do not fully understand what their current policies cover or where potential gaps may exist.

The report notes that uncertainty about insurance protection can affect capital allocation, operational investments, expansion plans, and contractual obligations. Organizations may have difficulty evaluating their financial exposure when they lack a clear understanding of which risks are transferred to insurers, which are retained, and which remain unprotected.

HUB International illustrated this issue through a case study involving a mid-sized manufacturer with a $75 million casualty insurance program. A detailed review identified punitive damages exclusions and unclear coverage provisions across several insurance layers, leaving only $20 million of the program providing the protection the manufacturer had expected.

Insurance Strategies and Emerging Risks

Organizations are also reassessing coverage needs as emerging risks develop. Cyber security remains a leading insurance priority, while interest in increasing coverage for AI adoption and risk readiness has declined. According to HUB International, AI-related exposures continue to evolve across financial, cyber, legal, and operational areas, raising questions about whether existing insurance policies adequately address these risks.

The report also found that some organizations were not considering insurance solutions for rising costs, macroeconomic pressures, and geopolitical challenges because they could not identify suitable coverage options. HUB International noted that exposures not adequately addressed by standard policies may require alternative coverage structures combined with operational planning, contractual risk allocation, and financial safeguards.

Risk Maturity and Long-Term Resilience

HUB International identifies risk maturity as an important factor in helping organizations respond to uncertainty. The report emphasizes three components: prioritizing competing risks, regularly reassessing exposures, and understanding the protection available through insurance and other risk mitigation measures.

According to HUB International, although more organizations are establishing formal risk management programs, gaps remain between recognizing exposures, understanding insurance protection, and incorporating risk considerations into strategic decisions. The report identifies addressing those gaps as an important part of strengthening organizational resilience and supporting long-term profitability.