Insurance for manufacturers, importers, sponsors, brand owners, distributors and other businesses involved in medicinal cannabis and cannabinoid products in Australia.

A specialist pharmaceutical product exposure

Medicinal cannabis and cannabinoid products can present a combination of pharmaceutical, product liability, manufacturing, supply-chain and regulatory-sensitive underwriting exposures. Insurers generally require a clear description of the products, the insured’s role in the supply chain, manufacturing and quality controls, sales territories and the pathway by which products are supplied.

Mercantile focuses on the insurance position. We do not provide advice on whether a product may be imported, manufactured, registered, supplied or prescribed, or whether a licence, permit or approval is required. Those matters should be confirmed with the Therapeutic Goods Administration, Office of Drug Control and your regulatory or legal advisers.

Businesses we can assist

We can consider insurance placements for Australian businesses involved in finished medicinal cannabis and cannabinoid products, including Australian sponsors and importers, manufacturers and contract manufacturers, pharmaceutical wholesalers and distributors, brand owners, product developers, testing and quality-service businesses, and logistics providers handling medicinal products.

The page is intended for medicinal and therapeutic products. Recreational cannabis businesses fall outside this page’s focus and may require a different insurance approach.

Products and activities insurers may assess

Depending on the business, underwriting may consider cannabinoid oils and oral liquids, capsules or other dosage forms, medicinal cannabis flower, CBD-dominant or THC-containing products, compounded or extemporaneously prepared products where relevant to the insured’s activities, imported finished products, locally manufactured products and products supplied through recognised therapeutic access pathways.

The exact product description matters. Insurers may ask about cannabinoid concentration, dosage form, intended patient use, packaging, labelling, storage conditions, batch testing, quality assurance, adverse-event history and whether the business is responsible for manufacture, importation, sponsorship, branding, distribution or professional services.

Insurance covers to assess

Public and products liability

Products liability is usually a core consideration for businesses that manufacture, import, sponsor, distribute or sell medicinal cannabis or cannabinoid products. The proposal should accurately describe the products, territories, turnover and activities. Policy exclusions, product-specific restrictions, jurisdiction limits and any requirement for insurer agreement to new products should be checked carefully.

Product recall and contamination

Product recall or contamination insurance may be available for some businesses, but it should not be assumed to be included within a standard liability policy. Available cover can differ significantly in respect of recall costs, withdrawal expenses, replacement costs, business interruption, rehabilitation expenses and third-party recall liability.

Property, stock and business interruption

Businesses holding high-value medicinal products, ingredients or finished stock should consider the adequacy of property and stock limits, storage arrangements, security protections, temperature requirements and business interruption cover. Insurers may impose specific conditions or protections where controlled or theft-attractive stock is involved.

Marine transit and pharmaceutical logistics

Imported products and domestic distribution can require marine cargo or transit insurance. Underwriters may consider packaging, security, transport providers, temperature control where applicable, accumulation values and the point at which title and risk transfer under supply contracts.

Professional indemnity and errors & omissions

Professional indemnity may be relevant where the insured provides consulting, technical, quality, regulatory-support, product-development or other professional services. Cover depends on the precise services performed and should not be treated as a substitute for products liability.

Cyber and management liability

Cyber insurance and management liability may also be relevant, particularly where the business relies on electronic patient, customer, research or commercial information, or where directors and officers have significant governance and stakeholder responsibilities.

Why the insurer needs the full supply-chain picture

Two businesses selling similar cannabinoid products can present very different insurance exposures. A local distributor buying finished stock from an Australian sponsor is different from an Australian entity that imports product, owns the brand, controls specifications and arranges overseas manufacture. Insurers will commonly want to know which entity is responsible for each stage and which legal entities should be insured.

Foreign manufacturing and overseas sales can also materially affect appetite. Provide details of contract manufacturers, countries of manufacture, quality controls, supplier agreements, sales by country and any United States or Canadian exposure.

Information commonly required for a quotation

For an efficient market approach, provide a description of all medicinal cannabis and cannabinoid products; CBD and THC profile where relevant; dosage forms; annual turnover and projected turnover; sales by country; the insured’s role as manufacturer, importer, sponsor, distributor or brand owner; manufacturing locations; contract manufacturers; quality-control and testing arrangements; storage and transit arrangements; previous recalls, complaints or adverse incidents; and details of any new products planned during the policy period.

We also require the legal entities to insure, wages, subcontractor and labour-hire costs where applicable, existing insurance schedules and wordings, claims history, known circumstances and any customer or investor insurance requirements.

Common insurance questions

Will a standard products liability policy automatically cover medicinal cannabis?

No assumption should be made. Some insurers may decline the exposure or apply product, cannabis, pharmaceutical or controlled-substance exclusions. The business activities and products should be disclosed clearly and the policy wording checked before cover is relied upon.

Can insurance be arranged for unapproved medicinal cannabis products?

Potentially, subject to insurer appetite and full disclosure. In Australia many medicinal cannabis products are not entered on the ARTG and may be supplied through permitted access pathways. Insurers may ask how the products are supplied and what role the insured performs. Mercantile can address the insurance placement; regulatory eligibility should be confirmed separately.

Is product recall automatically covered under products liability?

Usually not. Liability and recall are separate insurance issues. Recall cover, where available, needs to be reviewed for the insured events, costs, limits, deductibles and exclusions that apply.

Can Mercantile review an existing medicinal cannabis insurance program?

Yes. Send us the policy schedule and wording together with a clear description of the products, supply chain and countries of sale. We can review the insurance structure, identify areas that need clarification and approach suitable insurers, subject to market appetite and underwriting acceptance.

Related Life Science insurance sectors

Return to Pharmaceutical Company Insurance or explore all Life Science insurance sectors.

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• Pharmaceutical Licence Holder and Sponsor Insurance
• Pharmaceutical Distributor Insurance
• Pharmaceutical Contract Manufacturer Insurance
• Pharmaceutical Logistics Insurance

Prepared by Mercantile Insurance Brokers. Updated 3 October 2026. General insurance information for Australian businesses. Availability and cover depend on insurer acceptance and the applicable policy terms, exclusions, limits and deductibles.