Scientific knowledge and engineering tools for predicting coastal erosion are largely confined to temperate climate zones that are dominated by non-cohesive sediments. The pattern of erosion exhibited by the ice-bonded permafrost bluffs in Arctic Alaska, however, is not well explained by these tools. Investigation of the oceanographic, thermal, and mechanical processes that are relevant to permafrost bluff failure along Arctic coastlines is needed. We conducted physics-based numerical simulations of mechanical response that focus on the impact of geometric and material variability on permafrost bluff stress states for a coastal setting in Arctic Alaska that is prone to toppling mode block failure. Our three-dimensional geomechanical boundary-value problems output static realizations of compressive and tensile stresses. We use these results to quantify variability in the loci of potential instability. We observe that niche dimension affects the location and magnitude of the simulated maximum tensile stress more strongly than the bluff height, ice wedge polygon size, ice wedge geometry, bulk density, Young’s Modulus, and Poisson’s Ratio. Our simulations indicate that variations in niche dimension can produce radically different potential failure areas and that even relatively shallow vertical cracks can concentrate displacement within ice-bonded permafrost bluffs. These findings suggest that stability assessment approaches, for which the geometry of the failure plane is delineated a priori, may not be ideal for coastlines similar to our study area and could hamper predictions of erosion rates and nearshore sediment/biogeochemical loading.