Michigan Business Insurance

Picking a name. Designing a logo. Choosing a business structure. These are just some of the things that go into when starting a company. With so many loose ends to look after, it can be easy to get overwhelmed. Especially when it feels like every decision you make could impact your long-term success.

The good news is that you don’t have to figure it all out on your own. In Michigan, 99.6% of all businesses are “small,” which means there are plenty of local business owners to learn from.

You can also visit the Simply U blog to read about all things starting and growing a business. Today, the focus is on Michigan business insurance. We’ll review what it is, who may need it, and how to get it.

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Michigan Business Insurance: The Basics

When you think of “insurance,” it’s likely health care or protecting your car that comes to mind. Business insurance can work in similar ways, so you’re probably more familiar with the concept than you think.

Just like your health or personal belongings are worth protecting, so too is your business. Michigan business insurance provides coverage that could help you pay for claims in the event your business has an accident. There are different types of business coverage, which we’ll cover below.

All you need to know at this point, though, is that paying a monthly business insurance premium could help offset the cost of damages or legal fees if something goes awry with your business.

Michigan general liability insurance

Have you ever met someone who seems comfortable in just about any scenario? That’s what Michigan general liability insurance is like for your business. This versatile policy typically covers a wide range of incidents and is useful for most business types.

General liability insurance usually helps cover the costs of:

• Third-party damage, such as to a client or vendor’s property
• Bodily injury to another and medical expenses
• Claims arising from faulty products
• Advertising injury
• And more

This means that if you have a business accident and need to pay for damages, your Michigan general liability insurance policy could help you pay those bills up to your coverage limit. Here’s what that looks like for business owners:

• A hairdresser makes a house call for a new client to touch up their roots. The stylist’s hand is accidentally bumped, and a small amount of hair dye drops on the client’s couch. While this wouldn’t be a big deal in a salon, the homeowner is upset about their ruined furniture.

Since the hairdresser dropped the dye, the client insists that they buy a new couch. Just like that, an honest mistake could turn into a large dollar amount charge to the company credit card if the stylist doesn’t have insurance.

• A land surveyor is working on a job site when they bump into a ladder. Unfortunately, their customer was standing nearby and had to go to the hospital after the ladder landed on their head.

As a result, the surveyor has to pay for the customer’s medical bills. If the surveyor has insurance, this mishap could be a simple claim covered by their policy.

• A DJ is setting up for an event when another client calls. They step outside to answer the phone, and inside, someone trips over their electric cords. A speaker crashes into a party-goer's arm, and the equipment is ruined.

Not only does the DJ face the medical bills for the party-goer’s injury, but they also need to replace the event venue’s damaged speaker. Without business insurance, these big bills could use up all of the DJ’s savings.

Michigan general liability insurance can come in handy for the business examples above, but what about your company? Business insurance requirements usually depend on:

• The type of work you do
• Where you live

That means that an electrician, a caterer, and a microbrewery owner can all have different requirements and recommendations. Michigan general liability is required for the electrician and microbrewery, and the state suggests it for an at-home caterer.

When you’re thinking about insurance for your business, be sure to check for occupation-specific rules, as well as mandates by your county and city governments.

Not sure which rules apply to your company? We’ll review ways to search for requirements at the end of this post. You can also talk to a licensed insurance agent about your business by calling 855-559-0318 or answering a few questions online.

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P.S. We have a guide for Michigan contractor licensing and insurance requirements.

Professional liability insurance in Michigan

If you spend most of your workday sitting at a computer, the accidents we talked about with general liability insurance may seem unlikely. Some businesses are less at-risk for damages while operating their business and more susceptible to damages that arise as a direct result of the services you deliver.

Professional liability insurance provides coverage against claims of negligence. If a client claims your advice led them astray or you left out critical details, they may sue you for the negative impact it made.

For example, if a real estate agent didn’t submit an offer on a home on time, and the homebuyers lost out on the sale, they could sue the agent, claiming it was the agent’s bad timing that caused them to lose out on their dream home.

There aren’t any general rules for professional liability insurance in Michigan, but some occupations that could benefit from coverage include:

• Accountants
• Event planners
• Management consultants
• Graphic designers
• Photographers
• Real estate brokers
• Travel agents
• Life coaches
• And more

Keep in mind that you don’t have to do anything wrong to face a negligence claim. If a disgruntled client thinks your work set them back, you could end up spending thousands in legal fees to defend your case. Having professional liability insurance in Michigan is also great for building trust with potential clients and standing out among the competition.

Michigan workers compensation insurance

In most states, companies with part-time or full-time employees need workers compensation insurance. We’ll cover the details of who needs coverage in-depth further down, but chances are that if you have employees, you most likely need Michigan workers compensation insurance.

This type of coverage is used to pay for medical bills and lost wages for employees who get sick or hurt on the job.

Other types of Michigan business insurance

We’ve reviewed the three main types of Michigan business insurance, but your options don’t end there. Depending on your work and assets, you may want additional coverage, including:

• Property insurance: Take a moment to think about all of the equipment, supplies, and office space you have or will need. Could you easily replace it all if it were damaged or stolen? If not, additional property coverage could give you peace of mind.

• Home-based business insurance: If you operate your business from a home office, you should check to see if your homeowners or renters insurance covers the space. If your residential policy is lacking, a home-based business insurance plan could help.

• Automobile insurance: Do you drive a company van or use your personal car for work activities? Vehicles used for business in addition to pleasure sometimes need additional liability coverage.

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Michigan Workers Compensation: What You Need to Know

Time to dive a little deeper into your Michigan workers compensation requirements. As we mentioned, most businesses with employees need coverage. To get specific, here’s which employees have insurable employees:

• Private employers with one full-time worker who was with the company at least 35 hours a week for 13 weeks or more in the previous year
• Private employers employing three or more employees at one time (including part time employees)
• Agricultural employers with three or more full-time employees working at least 35 hours a week for 13 weeks or more in the previous year
• Householders employer at least one full-time domestic worker, working at least 35 hours a week for 13 weeks or more in the previous year

That means if you run a bakery from your home and use one part-time employee, you may not need coverage. But if you grow your part-time team to three or more people, you likely need to buy workers compensation insurance.

For more information or to answer any questions about Michigan workers compensation requirements, refer to the state’s guide to employer requirements or contact the Department of Labor and Economic Opportunity.

How Much Does Michigan Business Insurance Cost?

Maybe you’ve noticed a recurring theme around Michigan business insurance — it isn’t one-size-fits-all. There’s no standard requirement for all businesses, and much of it is left up to business owners to decide for themselves.

What that means is we can’t prescribe a price that makes sense for each unique entrepreneur. Considering that a customer slip-and-fall injury claim has an average price tag of $20,000, investing in insurance could pay for itself with a single accident.

Generally, your Michigan business insurance premiums depend on:

• Which policies you choose
• What type of services you provide
• Where you live

It’s free to get customized insurance quotes with Simply Business, so be sure to shop around to find a policy you’re comfortable with.

How Do I Get Michigan Business Insurance?

You just got a crash course in protecting your business, which is a lot of new info to take in. Here’s a recap of what you need to know about Michigan business insurance:

• There are three main types of coverage to consider — general liability insurance, professional liability insurance, and workers compensation insurance. If it applies to your business, you can also get extra coverage for your business property, vehicles, or office space.

• Michigan general liability insurance is a foundational policy for business owners to consider. Whether or not you legally need it to operate your company depends on the type of work you do. County- and city-level rules also may apply.

• Businesses that provide a professional service or offer advice should consider Michigan personal liability insurance. This type of policy could help you pay for negligence claims. Very few occupations have a legal requirement for it, but you may benefit from having coverage.

• Michigan workers compensation insurance requirements apply to most businesses with employees. This type of coverage helps employees who are injured on the job to recover medical bills and lost wages.

Now that you have your bearings about what Michigan business insurance can protect, it’s time to find a policy of your own. Let’s cover some tips on finding insurance requirements that apply to your company and choosing a plan:

• Talk to business owners in your area about what type of insurance coverage they carry. It’s even better if you can reach out to entrepreneurs in your line of work.

• Review the Guide to Starting and Operating a Small Business from the Michigan Small Business Development Center.

• Consult one-on-one with a licensed insurance agent at Simply Business by calling 855-559-0318.

• Search for license and permit rules for your business, since license applications often list insurance requirements.

• Think about how your business will grow in a year and how that will impact insurance needs.

• Reach out to Michigan trade associations or your local Chamber of Commerce to learn about rules that apply to you.

• If you perform multiple services, make sure to check requirements across all activities.

• Set up a consulting appointment with the Michigan Small Business Development Center.

Michigan Business Insurance Is There on Your Best and Worst Days

Generally, we think of insurance as something we pay for each month and hope we never have to use. If you do have an accident, your policy could keep your business from going bankrupt or depleting your personal savings.

Michigan business insurance has practical benefits that apply every day, though. For starters, showing potential customers your Certificate of Insurance (COI) could help you land more projects.

It also helps you stand out among competing businesses that don’t have the added layer of protection. If you want to rent office space or secure funding, business insurance can come in handy.

No matter your motivations to get Michigan business insurance, we can help. Give Simply Business a call at 855-559-0318 or get a free quote in minutes online.

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This content is intended to be used for informational purposes only. It is not intended to provide legal, tax, accounting, investment, or any other form of professional advice.