Insurance for Hemp Manufacturers | Guide To The Right Cover

The hemp industry is evolving fast, with plant extract manufacturers playing a key role in supplying everything from nutraceuticals and cosmetics to industrial hemp derivatives, and insurance for hemp manufacturers is becoming more important. With opportunity comes risk—particularly when your operations involve specialised machinery, regulatory oversight, and valuable raw materials.

If you’re involved in hemp processing or plant extract manufacturing, the right insurance isn’t just a safeguard—it’s a strategic investment in business continuity. At Grace Insurance, we help Australian manufacturers protect what matters most.

Quick Summary

• Hemp extract manufacturers face risks including machinery breakdown, fire, contamination, and supply chain disruption.
• Core insurance policies include commercial property, product liability, machinery breakdown, and business interruption.
• Tailored cover is critical due to regulatory scrutiny, plant complexity, and production volume.
• Working with a broker ensures your policy reflects the unique risk profile of your facility.

Who Needs This Type of Insurance?

Hemp is more than just a crop—it’s the base of a growing number of products in the wellness, food, textile, and cosmetics sectors. Insurance for hemp manufacturers is especially important for:

• Hemp oil and extract producers
• Industrial fibre and biomass processing operations
• OEM and contract manufacturers working with hemp ingredients
• Regulated plant extract laboratories in Australia
• Facilities using solvent-based or CO₂ extraction systems
  

Whether you’re supplying bulk material or finished extracts, your operation has exposure to risks that standard business policies don’t fully address.

Key Risks in Hemp and Extract Manufacturing

Even with strong safety practices, things can go wrong. Here are some of the most common risks faced by hemp manufacturers:

• Machinery breakdown – Extraction and filtration equipment failure can bring production to a standstill.
• Contamination – Chemical or microbial contamination during extraction or storage can damage stock and reputation.
• Fire or chemical exposure – Especially relevant for facilities using ethanol or flammable solvents.
• Product liability claims – If a product causes harm or doesn’t meet compliance standards.
• Supply chain disruptions – Delays in receiving biomass or packaging materials can halt delivery schedules.
• Regulatory non-compliance – Mistakes in labelling, testing, or ingredient handling can lead to fines or recalls.

Protecting your business requires more than basic cover—you need tailored solutions built for your sector.

Essential Insurance For Hemp Manufacturers to Consider

Public and Product Liability

If your extracts are used in consumables or applied to the skin, you’re exposed to product claims. Liability insurance protects you if someone is harmed by your product or alleges loss due to a manufacturing error. Learn more about public and products liability insurance.

Commercial Property Insurance

Covers your buildings, machinery, inventory, and finished goods from risks like fire, storm, or vandalism. This is especially relevant for processing facilities, see our commercial property insurance page for options.

Machinery Breakdown Insurance

Extraction equipment is complex—and costly. If a distillation unit or filtration system fails, breakdown cover can fund repairs or replacement and minimise downtime..

Business Interruption Insurance

If a fire, equipment failure, or covered event forces you to shut down temporarily, this policy helps maintain cash flow by covering lost revenue and ongoing costs. You can explore this further on our business insurance page.

Environmental Liability

If your process uses or stores chemicals, this cover protects against environmental damage, clean-up obligations, and potential regulatory action. While not always standard, it’s a critical add-on for solvent-based operations.

Goods in Transit

Covers raw hemp, intermediate extracts, or finished products while being transported—whether locally or across state borders.

What Impacts Premiums?

Each hemp manufacturing business has its own risk profile. Your insurance cost will depend on:

• Size and layout of your facility
• Type of extraction (solvent-based, CO₂, distillation)
• Nature of your products (ingestible vs industrial use)
• Volume and value of stock held on-site
• Compliance systems and safety protocols in place
• Previous claims or incidents

A good broker will assess all these factors to ensure you’re properly covered without overpaying.

Why Work With Grace Insurance?

We understand the challenges Australian manufacturers face—especially in emerging sectors like hemp. Our brokers have years of experience supporting industrial clients and navigating regulatory complexities.

At Grace Insurance, we offer:

• Tailored insurance for plant extract and hemp manufacturing
• Access to underwriters who understand legal hemp operations in Australia
• Guidance on policy limits, exclusions, and risk management
• Hands-on support during audits and claims
• Offices in Perth, Melbourne, and Sydney—serving manufacturers nationwide

Whether you’re scaling up production or setting up a new plant, we’ll work with you to make sure your cover grows with your business.

Speak to a Commercial Insurance Broker

You’ve invested time, capital, and expertise into your facility. Now it’s time to protect it.

We’re here to help you with all your insurance needs. From machinery breakdown to public liability, we’ll create a policy that fits your operation and helps you move forward with confidence.

Speak to a broker today and get a tailored quote.