Fewer states have contributed more to America’s entrepreneurial history than Michigan. Over a century after the Wolverine State launched the automotive boom, business is still going strong—and small business is no exception. In fact, 99.6% of Michigan companies are small businesses.1

As a small business owner in Michigan, there are certain bases you need to have covered before you can safely (or legally) operate. One of those bases is business insurance. In this guide, you’ll learn about the types of insurance you’re required to have, and some other coverage options to help you protect your business from the financial consequences of potentially expensive claims.

What business insurance am I required to get in Michigan?

Michigan workers’ compensation insurance

All employers in Michigan with three or more employees are legally required to have workers’ compensation insurance. Workers’ compensation insurance exists to safeguard employees from financial impact related to injuries or illnesses sustained on the job. As a business owner, it also protects you from liability related to employee injuries. Workers’ compensation covers expenses and lost wages caused by the following:

  • Work-related accidents and injuries, such as repetitive stress injury, and resulting disability
  • Illnesses caused by or related to employment

Michigan auto liability insurance

If you drive a car, truck or van as part of your business operation, you’re required to have auto liability insurance or qualify as a self-insurer. Michigan has unique insurance laws. Auto liability insurance can provide the following coverages to you and your business for claims resulting from auto accidents involving your vehicle:

Residual Bodily injury – If you get into an accident in which you are at fault and the driver or a passenger of the other vehicle is seriously injured or killed, your auto bodily injury liability insurance will cover the additional costs arising out of bodily injury, including medical expenses and death benefits once the injured party has exceeded all PIP benefits available under their policy.

Residual Property damage – If you get into an accident in a state outside of Michigan for which you are at fault, your auto policy’s property damage liability insurance covers the cost to repair or replace the other party’s vehicle.

In Michigan, your auto liability insurance also provides coverage for:

Personal Injury Protection (PIP) – Personal Injury Protection covers 80 percent of all necessary and reasonable medical expenses up to $10,000 resulting from a covered injury, no matter who caused the crash.

Property Protection Insurance (PPI) – PPI is a type of liability coverage that’s required in Michigan. It covers damage to “tangible property” (such as parked cars, fences, buildings and other property) within the state of Michigan.

Also, depending on the use of your vehicle, the kind of vehicle or if your vehicle is registered or titled under your business name, you may need a commercial auto insurance policy to avoid penalties.

What other types of business insurance are recommended for Michigan?

Michigan general liability insurance

General liability insurance (also known as CGL—for commercial general liability) is one of the most essential and effective ways to safeguard your business. It protects your business from the financial consequences resulting from liability related to third-party non-employee bodily injury or third party property damage that arises from your business operations. It also provides coverage for personal and advertising injury. Without general liability insurance coverage, you could be in financial trouble in the event of an unfortunate accident involving a customer or other third party.

Michigan professional liability insurance

If you provide professional services and your advice is alleged to have led to one of your clients suffering a financial loss, professional liability insurance can help. When a former customer or client claims—rightly or wrongly—that a mistake in your work led them to suffer a financial loss, professional liability insurance provides you with investigation and defense of the claim as well as making payments of any settlements or judgments.

Inland marine insurance

Inland marine insurance is designed to protect that vital equipment you use to make your business run smoothly. It protects your business by covering costs associated with accidentally damaged, lost or stolen equipment that is on the go with you. Whether you have an expensive tool collection, pricey construction materials, or other equipment you transport to a job site, having inland marine insurance is a no-brainer. At Thimble, we offer inland marine insurance, or Business Equipment Protection as we call it, with coverage for up to $5,000 worth of business property and equipment.

Commercial property insurance

Commercial property insurance protects your company’s building and the contents inside it from all kinds of risks of physical loss or damage, including theft, vandalism, fires and natural disasters such as floods, storms or earthquakes. Commercial property insurance is often included as part of a Business Owners’ Insurance Policy, or BOP.

Professions covered in Michigan

No matter what your business is, if you’re in Michigan, you’ll benefit from being insured. If a non-employee slips and falls due to a workplace hazard or you accidentally damage a client’s property while working in their home, the last thing you need is to pay out-of-pocket for damages. In Michigan, Thimble’s business insurance covers:

Cost of business insurance in Michigan

At Thimble, the cost of your business insurance depends on a variety of factors. The amount of risk involved in your business, the industry you’re in, and the amount of business you do all play a part in determining your policy premium.

Another important factor is your location. A large city like Detroit might have higher premiums on average than smaller places like Alma or Ludington.

Finally, Thimble will look at factors such as your crew size, coverage amount and the number of years you’ve been in business before determining how much your premium will be.

Median Michigan insurance costs

Coverage Period

By the hour

By the day

By the Week

By the month

Median Cost

$7.50

$13.27

$54.70

$56.14

Top cities for businesses in Michigan

  • Ann Arbor
  • Battle Creek
  • Dearborn
  • Detroit
  • Flint
  • Grand Rapids
  • Kalamazoo
  • Lansing
  • Mount Pleasant
  • Saginaw

Bottom line: Michigan business insurance

The Wolverine State has a unique place in the entrepreneurial history of America. If you’re serious about starting your business in Michigan, take some time to consider what kinds of insurance coverage you’ll need. Being covered means you can focus on growing your company without worrying about expensive claims against your business.

Even if you’re just starting up, you can find Michigan business insurance coverage that’s right for you. Through Thimble, you can get a quote for your general liability insurance, professional liability insurance or Business Equipment Protection in less than a minute and if you decide to buy, you’ll be able to access your policy and Certificates of Insurance (COIs) in your inbox instantly.

Source:

  1. U.S. Small Business Administration Office of Advocacy – Michigan Small Business Economic Profile

Written on March 20, 2020 | Modified on: August 13, 2021

Our editorial content is intended for informational purposes only and is not written by a licensed insurance agent. Terms and conditions for rate and coverage may vary by class of business and state.