Key Takeaways
- Hemp growers may qualify for federal crop insurance through the USDA, which is not available to marijuana growers.
- Crop insurance generally does not protect hemp destroyed for exceeding THC limits, so compliance planning remains essential.
- Drying and storage barns full of dried biomass are a significant fire exposure that farm property coverage must address.
- Growers who sell processed CBD or other hemp products take on product liability exposure beyond a typical farm.
Hemp farm insurance combines federal crop insurance, where available, with private coverage for farm buildings, equipment, stored biomass, vehicles, liability, and workers. Licensed hemp growers can access USDA crop insurance programs that marijuana growers cannot, but those programs cover only part of a farm's risk, explains Bozzuto Group, a San Diego–based specialty commercial insurance brokerage.
What Crop Insurance Is Available for Hemp?
Unlike marijuana, hemp is a federally recognized agricultural commodity, so licensed growers may qualify for federal crop insurance administered by the USDA's Risk Management Agency (RMA). According to the RMA, current options include:
- Multi-Peril Crop Insurance pilot: covers yield loss from insurable causes for hemp grown for fiber, grain, or CBD in select counties.
- Whole-Farm Revenue Protection: protects revenue for the whole farm, including hemp, and is offered nationwide.
- Nursery coverage: hemp grown in containers may be insurable under nursery crop programs.
Federal crop insurance is sold through crop insurance agents, and eligibility depends on your county, your license, and program rules that the RMA updates by crop year. You must hold a valid hemp production license or authorization from the USDA, your state, or your tribe. Growers in areas without a permanent crop insurance program can ask their local Farm Service Agency office about the Noninsured Crop Disaster Assistance Program.
What about hot hemp?
Hemp that tests above the legal THC limit, often called hot hemp, generally must be destroyed or remediated under federal and state rules. That loss is generally not treated as an insurable cause of loss under crop insurance, and private policies usually exclude it as well. Confirm the current treatment with your crop insurance agent. Genetics, testing timing, and harvest windows remain your primary protection.
The federal definition is changing
A federal law signed in November 2025 changes the hemp definition to a total THC test that counts THCA, rather than delta-9 THC alone. Most of those changes are now scheduled to take effect December 11, 2026, after Congress delayed the original November 12 date. A total THC standard may make it harder for some flower-focused varieties to stay compliant, so talk with your state regulator and compliance advisor about how testing will work for your next crop.
How Do You Insure Farm Buildings and Stored Hemp?
Crop insurance typically covers the plant in the field. Once harvested, hemp moves into a different risk category. Drying barns, curing rooms, and storage buildings can hold large volumes of dried biomass, which is combustible. Heaters, fans, and dryers running near that material add ignition sources.
Farm property or commercial property insurance can cover buildings, harvested and stored product, and processing equipment, but underwriters will ask about:
- Building construction and distance between structures
- Heat sources used for drying, and how they are maintained
- Electrical systems and extension cord use in temporary drying setups
- Fire extinguishers, water supply, and distance to the fire department
- Moisture monitoring to prevent spoilage and spontaneous heating
Confirm that harvested hemp is a covered type of property and how it is valued, whether at cost or at a market price.
What Equipment Coverage Do Hemp Farms Need?
Tractors, transplanters, harvesters, balers, and drying equipment are often worth more than the farm buildings themselves. Mobile equipment is usually insured under a farm equipment or inland marine schedule that follows it across fields and on the road between properties. Stationary machinery such as dryers, decorticators, and irrigation pumps may need equipment breakdown coverage for mechanical or electrical failures.
| Exposure | Typical coverage |
|---|---|
| Hemp in the field | Federal crop insurance, where eligible |
| Harvested and stored hemp | Farm or commercial property |
| Tractors and harvesters | Farm equipment or inland marine |
| Dryers and processing machinery | Property plus equipment breakdown |
| Farm trucks and trailers | Commercial auto |
| Injuries to visitors or buyers | Farm liability |
| Consumer claims from CBD products | Product liability |
What Liability Risks Do Hemp Farms Face?
Farm liability insurance covers injuries to visitors, buyers, and inspectors on your property, as well as some damage you cause to others. Pesticide or herbicide drift onto a neighbor's crop is a common concern, and many policies limit it, so ask how chemical application is handled. Workers' compensation rules for agricultural employees vary by state, but seasonal harvest crews are often covered.
If you process hemp into oils, tinctures, smokable flower, or other consumer goods, you are no longer only a farm. Product liability insurance covers claims that a product caused harm, and buyers will often require it with additional insured status.
Review buyer and processor contracts
Grow contracts and biomass purchase agreements often include insurance requirements, indemnification clauses, and terms about who bears the loss if a load is rejected, stolen in transit, or fails testing after delivery. Read these provisions before planting, not at harvest. Ask your attorney to review indemnity language, and ask your broker whether your policies meet the required limits and endorsements so you are not scrambling for certificates when the buyer's truck arrives.
How Bozzuto Group Helps
Bozzuto Group helps hemp growers build the commercial side of a farm program: buildings, stored biomass, equipment, vehicles, liability, and product coverage. We coordinate with your crop insurance agent so field coverage and post-harvest coverage fit together, and we help you document drying operations and fire protections for underwriters. Coverage depends on the carrier and policy wording. Learn more about our agriculture and hemp insurance work.
To review your hemp farm coverage, call Bozzuto Group at 858-805-1865 or request a quote online.
Frequently Asked Questions
Can hemp farmers get federal crop insurance?
Yes, licensed hemp growers may qualify. The USDA Risk Management Agency offers a Multi-Peril Crop Insurance pilot for hemp in select counties, Whole-Farm Revenue Protection nationwide, and nursery coverage for container-grown hemp. Eligibility depends on your location, license, and program rules, so work with a crop insurance agent to confirm options for your farm.
Does crop insurance cover hemp that tests hot for THC?
Generally, no. Hemp that exceeds the legal THC limit must usually be destroyed or remediated, and that is not typically treated as an insurable cause of loss under federal crop insurance. Private policies commonly exclude it too. Confirm details with your crop insurance agent and manage the risk through genetics, testing, and harvest timing.
Is harvested hemp covered by crop insurance?
Crop insurance focuses on the crop in the field and yield or revenue loss. Harvested hemp sitting in a drying barn or storage building is typically insured under farm or commercial property coverage instead. Confirm that harvested hemp is listed as covered property, how it is valued, and what fire protection conditions apply.
What is the new federal hemp definition?
A federal law signed in November 2025 changes the hemp definition to measure total THC, including THCA, and caps finished products at 0.4 milligrams of total THC per container. Most of the changes are scheduled to take effect December 11, 2026, after a congressional delay. Rules may change again, so check with your compliance advisor.
Do hemp farmers need product liability insurance?
If you only sell raw biomass to processors, product liability needs may be limited, though buyers sometimes require it. If you make or sell consumer products such as CBD oils, tinctures, or smokable flower, product liability insurance becomes important because consumers and retailers may bring claims alleging harm or mislabeling.