Michigan is heralded for its incredible terrain, wonderful people, contributions to the automobile industry, and its bustling workforce. If you’re an independent contractor or own a business in the state of Michigan, you know what an incredible place
it is to live in.

With that being said, are you familiar with the laws and requirements of Michigan business insurance? Additionally, if you don’t have employees, do you know what types of policies you should have in place to ensure that you’re protected from risk? In
this quick guide, we’ll detail everything you need to know about Michigan insurance laws and how to best protect your business should something go wrong.

Michigan insurance laws

Michigan is protected by the Workers Disability Compensation Act. Per Michigan’s Department Of Labor and Economic Opportunity:

“This Act was first adopted in 1912 and provides compensation to workers who suffer an injury on the job and protects employers’ liability. The mission of the Workers’ Disability Compensation Agency is to efficiently administer the Act and provide
prompt, courteous and impartial service to all customers.”

In which case, the two state-mandated types of insurance are:

Workers’ Compensation — Any company that has employees (even if it’s just one) must have a workers’ compensation policy in place. This type of insurance policy is meant to ensure that, should an employee incur a bodily injury while
at work, they are protected from the associated medical costs.

Auto Insurance — If the business owns a vehicle, then it needs to be insured. A vehicle is not exempt from needing insurance, even if it’s owned by an individual and you’re using it for business. If something involving your car goes
wrong while you’re on the job, it likely won’t be covered under your existing auto insurance.

  • An Important Note: In many states, one of the many insurance laws regards disability insurance. This insurance is put in place to ensure that, should a personal injury or illness occur to an employee outside of the workplace,
    they have a safety net to fall back on. In which case, this business insurance policy would compensate them for a given amount of time while they heal. Michigan, however, is not one of those states.

What kind of insurance coverage do companies need in Michigan?

As an independent contractor or small business owner, you know that the hustle is real. Amidst constantly trying to generate enough income to support you or your employees, handling the day-to-day business operations, and trying to sustain or scale,
your days never seem to have enough time in them.

Surely, liability insurance is the last thing on your mind. But what happens when a client is injured due to the work you performed? Or what happens when you accidentally damage your clients’ personal property? Lastly, what if a client sues you because
they aren’t happy with the services you rendered?

Let’s face it, every industry has inherent risks. Running a business has risks. Being a human has risks. Everyday, at any given job site, there is always a level of risk involved. In which case, every independent contractor and business could benefit
from a general liability insurance and professional liability insurance policy.

General Liability Insurance

General liability insurance protects businesses from third-party claims of bodily injury, personal injury, and property damage. Should one of your clients or a third party claim that they (or their things) were injured at your fault, you could be
held liable.

What could that look like, exactly?

General liability examples:

  • You’re an independent contractor, laying concrete on the roof of a property, sealing it in preparation for heavy rain. While you’re up on the roof, your concrete mix (bundled up in a bag) falls off. You’ve tied everything up to ensure it won’t
    hurt anyone, but as the string pulls tight, the bag swings and breaks a massive window. The client now thinks it’s your responsibility to pay for the damages.
  • Say, you’re a makeup artist and you’ve finally booked a gig that might help you expand your network and get more work. The model you’re working with is a bit uptight, but whatever. The work is what’s important. However, as you begin to apply the
    makeup, she starts to have an allergic reaction. Even though you use oil-free, natural products, she blames you for the reaction and wants you to pay for the medical bills from the ER visit.

In reality, these types of situations occur. It only takes one fickle client or third party to file a claim—one that could tie up the hours you need for operations, cost you money, and escalate into something bigger (like a lawsuit).

Professional Liability Insurance

Professional liability insurance is coverage structured to protect independent contractors and businesses if their clients say that:

  • You didn’t do your job right
  • You made a mistake that costed them money

Also known as errors and omissions insurance (E&O), this type of policy works to protect your business when a client claims that you were negligent.

Professional liability example:

  • You’re an aerobics instructor that’s been hired by a small group to instruct a class. When you’re there, you decide to increase the regiment. Unfortunately, one of your students is injured during the workout, which causes them to miss out on a
    photoshoot they had scheduled the next day. Because they missed out on the job, they’ve lost money. They blame you for negligence, claiming that you should’ve taken note of their skill level and refrained from the rigorous movements.

In any case, if a client believes you to have made an error or mistake, then an E&O policy can help mitigate the consequences.

How to get Michigan business insurance

After reading this guide, if you think you’re liable (or not complying with the law), then Thimble can help. With our on-demand, flexible, and affordable policies, we take the hassle out of insurance.

You can do everything you need right here from our website (or by downloading the Thimble mobile app) by clicking “Get a quote.”

After you input a few details about your services, where you’re located in Michigan, and the desired liability coverage length (choose between hourly, daily, or monthly policies), we’ll generate a quote immediately—outlining the terms and costs.

Additionally, our insurance is so affordable because of our pay-as-you-work structure, meaning you’ll only ever pay for insurance coverage when you’re on the job. Thimble: insurance that works when you do. It’s that easy.