What are the requirements for small business insurance in Michigan?
In Michigan, some insurance policies are mandated by law, while others depend on the specifics of your business. Michigan state law requires workers’ compensation insurance for all small businesses that employ three or more workers, or employ one or more workers for 35 or more hours per week for 13 or more weeks. Professional liability insurance is not required by the state, but your clients may ask for proof of this policy before signing a contract. Also known as errors and omissions insurance or malpractice insurance, this policy can help protect against lawsuits. It’s recommended for professionals such as doctors and lawyers who provide expert advice to their clients.
If your small business handles sensitive information such as credit card numbers or Social Security numbers, then another policy to consider is cyber liability insurance, which provides protection in the event of a data breach or cyberattack. Finally, a landlord may ask for proof of commercial property insurance or general liability insurance as part of the lease agreement for your office or other rented space.
Insureon is licensed in Michigan. Complete our free online application to receive quotes from several top-rated U.S. insurance providers. Our industry experts can help you determine which policies are most appropriate for your small business.
Your industry determines which policies are a good fit for your small business. Insureon has experts in almost every field who will work with you to find insurance policies that match your business’s unique risks and assets. To learn about policies for your industry, complete our online application for free quotes, or choose your profession from the list below.
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Michigan small business insurance policies
Small businesses in Michigan most often purchase the following policies:
General liability insurance
Any business that works directly with customers should protect itself against potential fallout from customer injury or damage to customer property. General liability insurance can help pay for related legal costs and, in certain cases, medical expenses. Beyond protecting your interests, your landlord and your clients might ask for proof of this insurance as part of a commercial lease agreement or contract. Situations where general liability might help with costs include:
- A hairstylist at your salon accidentally burns a client with a styling tool.
- A worker in your moving company damages a sofa while transporting it.
- A client trips in the revolving door in your lobby and twists an ankle.
Commercial property insurance can help cover the cost of repairing or replacing equipment, inventory, and other business property when it is stolen, damaged, or destroyed. It also provides coverage in the event of damage to your office space or building, such as from a fire or a burst water main. Commercial property insurance can help with costs including:
- Packages go missing from one of your company’s delivery vans.
- A piece of construction equipment breaks on a work site.
- A worker at your warehouse damages shelving and inventory with a forklift.
Workers’ compensation insurance
In Michigan, state law mandates workers’ compensation coverage for all small businesses that employ three or more workers, or employ one or more workers for 35 or more hours per week for 13 or more weeks. This policy helps cover the costs of medical fees and lost wages that result from on-the-job injuries or occupational illness. Workers’ comp could help cover costs in the following cases:
- A personal trainer is injured by a dropped barbell at your gym.
- A lawyer is injured in a violent dispute between his client and the defendant.
- An architect falls into a ditch at a construction site and breaks an arm.
Professional liability insurance (errors and omissions insurance)
Professional liability insurance helps cover legal costs related to expert advice or services that you provide to your clients. It can help provide coverage when:
- You break the terms of a client's contract.
- Your error results in a client's revenue loss.
- You miss a deadline, negatively impacting a client’s business.
Cyber liability insurance
In Michigan, state law requires businesses to contact residents whose information has been compromised by a data breach or cyberattack. When more than 1,000 residents are affected, the breach must be reported to consumer reporting agencies, as well. If your small business accepts credit cards or stores sensitive client information, you may be at risk of a cyberattack. In the event of a security breach, cyber liability insurance may help cover:
- Data breach notification costs.
- Forensic investigation into the cause of the breach.
- Credit monitoring for parties affected by the breach.
- Legal expenses if you’re sued for not preventing the breach.
Business owner’s policy (BOP)
If your small business is eligible, you can save money by purchasing a business owner’s policy. This policy bundles general liability and commercial property insurance at a lower rate than if they were purchased separately. Your business may be eligible if:
- You work in a low-risk industry.
- You have fewer than 100 employees.
Commercial auto insurance
Any vehicles owned by your business must be covered by commercial auto insurance. This coverage can help pay for:
- Repairs to the other driver’s car in an accident.
- The other driver’s medical expenses due to injury.
- Legal expenses if you’re sued over an accident.
- Repairs to your vehicle if it’s damaged by theft, weather events, or vandalism.
Michigan business insurance licensure information
In Michigan, insurance agents, agencies, and brokers are licensed by the state’s Department of Insurance and Financial Services. Insureon is licensed in Michigan as BIN Insurance Holdings, LLC (NPN 15752926) for property and casualty insurance and for surplus lines. You can verify our licensure with the Department of Insurance and Financial Services on its insurance search page by entering our Michigan state ID, 0092090, into the "System ID Number” field.