As a contractor working in Michigan, you must obtain a suitable Michigan contractor insurance policy to meet the expectations of the state and client contracts. This article will show the insurance requirements, function of policies, cost of premiums, and the best companies.
Unlike other states, Michigan does not impose many strict insurance requirements to apply for a residential builder or maintenance alteration contractor license. These licenses are necessary to perform repair, alteration, addition, subtraction, or improvement work in Michigan's residential and commercial structures.
However, Michigan does impose some insurance requirements for businesses in the state for workers' compensation. You must have a workers' compensation policy if you employ one or more workers that work 35 hours or more a week. Alternatively, if you have three or more part-time workers per week, you will also be required to get an insurance policy.
You will still want to pick up additional policies to protect your business against the financial strains of unexpected liability and business damage. Also, certain clients you work for may have different requirements for insurance.
The following sections will describe the details of the policies that will make up your Michigan contractors' insurance.
| CoverWallet | NEXT (Best) | Thimble | Hiscox | The Hartford | |
|---|---|---|---|---|---|
| Per occurrence limit | $1,000,000 | $1,000,000 | $1,000,000/$2,000,000 | $2,000,000 | $1,000,000/$2,000,000 |
| Aggregate limit | $2,000,000 | $2,000,000 | $1,000,000/$2,000,000 | $2,000,000 | $1,000,000/$2,000,000 |
| Products and completed operations aggregate limit | $2,000,000 | $1,000,000 | $2,000,000 | $1,000,000 | $1,000,000 |
| Advertising injury coverage aggregate limit | $1,000,000 | $1,000,000 | $2,000,000 | $1,000,000 | $1,000,000 |
| Tenant’s legal liability coverage limit | $300,000/$1,000,000 | $300,000 | $100,000 | $100,000 | $1,000,000 |
| Waiver of subrogation included? | Yes | No | Included | Can be included | No |
| Hired/non-owned auto liability coverage included? | Yes | No | No | Can be included | Can be included |
| Equipment breakdown floater included? | No | Yes | Yes | Can be included | Can be included |
| Can you get a certificate of insurance online? | Yes | Yes | Yes | Yes | Yes |
| Name additional insureds? | Yes | Yes | Yes | Yes | Yes |
| Deductible | $0 | $0 | $0 | $0 | $0 |
General liability insurance is a policy that addresses third-party liabilities that can threaten your business. Typically this contractor liability insurance Michigan will cover property damage, bodily injury, and personal injury.
Cyber liability–Provides insurance coverage for incidents involving cyber attacks and data breaches your business
Tools and equipment insurance–Covers tools and equipment as you transport and use them on job sites when they get damaged or stolen
A typical general liability insurance coverage limit is $1 million per occurrence and $2 million aggregate.
| CoverWallet | NEXT | Thimble (Best) | Hiscox | The Hartford | |
|---|---|---|---|---|---|
| Per occurrence limit | $1,000,000 | $1,000,000 | $1,000,000/$2,000,000 | $1,000,000 | $1,000,000 |
| Aggregate limit | $2,000,000 | $2,000,000 | $1,000,000/$2,000,000 | $1,000,000 | $2,000,000 |
| Name additional insureds? | Yes | Yes | Yes | Yes | Yes |
| Waiver of subrogation included? | Yes | No | Yes | Can be included | No |
| HIPAA coverage included? | No | No | No | No | No |
| Sexual misconduct coverage included? | No | No | No | No | Can be included |
| License defense coverage included? | No | No | No | No | Can be included |
| Deductible | $500 | $500 | $500 | $50/$10,000 | $500 |
A professional indemnity policy will protect your contracting business against lawsuits, legal judgments, and liabilities from professional mistakes. This covers legal defense expenses, settlements, and reimbursements for a client’s financial losses.
Abuse and molestation coverage–Protects your business against claims of sexual abuse. This coverage may be necessary to work in places where children, minors, and vulnerable adults are
Prior acts–This will allow you to get covered for events that may have occurred before the start of your professional indemnity policy
This type of contractors insurance Michigan will offer coverage limits of $1 million or more.
Yes. Lousy advice would be covered under your professional indemnity policy. A client who gets bad advice may experience financial losses that may cause them to sue you for damages.
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| CoverWallet | NEXT (Best) | Thimble | Hiscox | The Hartford | |
|---|---|---|---|---|---|
| Building coverage limit (minimum) | $50,000 | $260,000 | $25,000/$500,000 | $25,000 | $60,000 |
| Contents coverage limit (minimum) | $50,000 | $22,000 | $25,000/$500,000 | $25,000 | $60,000 |
| Outdoor signs | Excluded | $2,500 | Excluded | Excluded | Excluded |
| Accounts receivable | Excluded | Excluded | $5,000/10,000 | Included | Excluded |
| Money and securities | Excluded | $2,500 | $1,000 | Included | Excluded |
| Lock and keys | Excluded | $2,500 | Excluded | Excluded | Excluded |
| Business interruption floater | Excluded | Included | Included | Included | Excluded |
| Equipment breakdown floater | Excluded | Included | Excluded | Excluded | Excluded |
| Inland marine insurance floater | Excluded | Excluded | $10,000 | Excluded | Excluded |
| Employee dishonesty floater | Excluded | $5,000 | $2,500 | Included | Excluded |
Commercial property insurance can help you repair and replace property damaged by a physical cause. Commonly covered events include lightning, fire, theft, and vandalism.
Business interruption–Helps you supplement lost income when your business cannot operate due to physical property damage
Equipment breakdown–Protects your contracting equipment from damage resulting from internal causes like electronic surges, shortages, and mechanical failures
Your Michigan contractor's insurance will have a typical commercial property coverage limit of $60,000. The exact amount will depend on the value of what you want to insure.
An insurer will look at your commercial property through three different lenses to determine its value:
Fair market value–How much the item would sell if you put it on the market.
Replacement cost value–How you would need to spend to buy a replacement item.
Actual cash value–This is how much it would cost to replace your property after considering depreciation.
| CoverWallet | NEXT (Best) | Thimble | Hiscox | The Hartford | |
|---|---|---|---|---|---|
| Building coverage limit (minimum) | $50,000 | $260,000 | $25,000/$500,000 | $25,000 | $60,000 |
| Contents coverage limit (minimum) | $50,000 | $22,000 | $25,000/$500,000 | $25,000 | $60,000 |
| Outdoor signs | Excluded | $2,500 | Excluded | Excluded | Excluded |
| Accounts receivable | Excluded | Excluded | $5,000/10,000 | Included | Excluded |
| Money and securities | Excluded | $2,500 | $1,000 | Included | Excluded |
A business owner's policy combines several different insurance protections into one policy. These policies are typically commercial property, general liability, and business interruption insurance.
Cyber liability–This policy adds a layer of protection against the financial losses of cyber-attacks and data breaches to your contracting business
Employment practices–Covers your business against claims of wrongful termination, harassment, or discrimination from employees
Your typical business owner’s policy will cover $1 million in general liability protection and $50,000 in commercial property coverage.
Your BOP will offer similar protection to a commercial property policy. This means you can protect your building, equipment, furniture, inventory, and electronics with this policy.
| NEXT | Thimble | Hiscox | The Hartford | |
|---|---|---|---|---|
| Aggregate limit | $3,000/$10,000 | $2,500/$5,000 | $15,000/$25,000 | $5,000-$10,000 |
| Covers hired and borrowed equipment? | $3,000/$10,000 | $2,500/$5,000 | No | Yes |
| Miscellaneous equipment also covered? | $5,000/$10,000 | No | Yes | Yes |
| Offered as an endorsement to general liability insurance? | Yes | Yes | Yes | Yes |
| Deductible | $500 | $500 | $0 | $0 |
Tools and equipment insurance is an excellent pickup for Michigan contractors because it helps you repair or replace your business tools when you get into trouble. Perils covered are fire, theft, vandalism, operator error, lightning, and electrical surges.
Business interruption–If a damaged or stolen tool delays your business operations, you can get compensated for the lost income and help pay things like loans and other obligations
Rental protection–You can extend insurance protection to rented tools and equipment you use as a contractor
Tools and equipment insurance coverage will range between $5,000 and $20,000 for your tools.
No, if you or an employee intentionally destroy a tool, this policy will not cover you. You will want to get an employee dishonesty insurance policy to cover harmful employee actions that result in financial loss.
Commercial auto is an insurance policy for your business vehicles. This will protect them while performing business-related activities with coverages like:
Auto-liability–Helps you pay for the costs of liability claims like court costs and judgments from contracting vehicles
Collision–A physical damage protection that helps you pay for vehicle damage in road accidents
Comprehensive–If your vehicle gets damaged physically by sources other than collisions, this policy will cover you
Roadside assistance–Helps you pay for the costs of your vehicle breaking down on the side of the road. It can help you pay for services to tow your vehicle or restore it to working order
Underinsured/uninsured motorist–This will cover instances where someone else's insurance coverage is inadequate to help pay for the damage they cause to your contracting business interests
Yes. The Michigan Department of Transportation requires that all trailers be registered if they are driven and moved on the roadways. You will need enhanced liability coverage, comprehensive coverage, replacement cost coverage, and contents coverage.
Michigan contractors can use an excess liability insurance policy to enhance the coverage limits of an existing one. This policy does nothing on its own except when applied to an underlying insurance policy you already have.
Excess liability coverage limits can go as high as your insurer will allow. You may be able to extend a policy by $25 million or more.
Workers' compensation insurance is a policy required by law in Michigan that protects any employees you have in your contracting business. It will provide a way to replace lost income and pay for medical expenses when your workers get injured. Failure to get workers compensation insurance will have serious legal consequences.
A Michigan medicare contractor is a private healthcare insurer that can process Medicare claims in your jurisdiction. Suppose you are on a Medicare health insurance policy and file a workers comp claim. In that case, you may be able to get conditional payments from Medicare if your workers' compensation policy is slow to pay your medical bills. However, workers' compensation pays the primary care costs related to workplace accidents or injuries.
| Cost per Month | Cost per Year | Deductible | |
|---|---|---|---|
| General liability insurance | $35 | $420 | $0-$500 |
| Professional liability insurance | $60 | $720 | $1,000-$2,000 |
| Commercial property insurance | $51 | $612 | $1,000-$2,000 |
| Business owner's policy | $74 | $888 | $1,500 |
| Tools and equipment insurance | $38 | $456 | $500-$1,000 |
| Commercial auto insurance | $62 | $744 | $500-$1,000 |
| Workers compensation insurance | $91 | $1,092 | $2,500-$5,000 |
| Excess liability insurance | $43 | $516 | $500-$1,000 |
Your Michigan contractor's insurance policy is $35 per month or $420 per year for a $1 million general liability policy. Actual premiums depend on the specific policies, coverage limits you need, and the details of your business. Here’s a table showing the cost of a $1 million general liability insurance from the best companies:
| Cost per Month | Cost per Year | Best for | |
|---|---|---|---|
| NEXT | $16 | $192 | Best overall pick for Michigan contractor insurance |
| The Hartford | $19 | $228 | Workers compensation insurance for Michigan contractors |
| CoverWallet | $22 | $264 | Comparing contractor insurance quotes online |
| Tivly | $24 | $288 | Comparing contractor insurance quotes over the phone |
| Thimble | $27 | $324 | Short-term contractor insurance |
| Hiscox | $29 | $348 | Personalized insurance services for contractors |
Get all the best quotes from leading providers in a click of a button!
Here are the companies to work with. Read some of the reviews below to know their pros, cons, and average rate for a $1 million general liability policy.
Best overall
Issues an online proof of insurance instantly
Fastest general liability insurance
Great customer service and reputation
Excellent rates
Outstanding value for money
Get a 10% discount if you buy two or more policies
None found
NEXT is an online insurance provider with policies that you can purchase quickly to get coverage sooner. They have an A- rating with AM Best and a B+ from the Better Business Bureau. NEXT managed to generate $650 million in premium revenue in 2021.
Best for: Best overall pick for Michigan contractor insurance
Average cost: $16 per month
Our rating: 10/10
A popular choice with small businesses
Get your quotes online
Perks for AARP members
Helpful customer service team
General liability insurance allows fewer add-ons
The Hartford is one of the longest-standing insurers on the list. They have over 200 years of experience and offer an outstanding selection of policies that fit into your contractor insurance plan. This company boasts an A- rating from AM Best, making them dependable for paying out its policy claims.
Best for: Workers compensation insurance for Michigan contractors
Average cost: $19 per month
Our rating: 10/10
Choose from over ten carriers and top insurance names
Compare quotes and keep track of policies with convenient digital tools
Cost-effective insurance policies
Not an insurance company but an insurance broker
CoverWallet is a digital marketplace for comparing insurance quotes. You can choose from top partners with policy options like general liability, commercial property, and workers' compensation. CoverWallet has an A+ rating with the Better Business Bureau.
Best for: Comparing contractor insurance quotes online
Average cost: $22 per month
Our rating: 10/10
Offers over 200 insurance partners to choose your policy from
Allows you to compare quotes over the phone
Digital marketplace platform that is easy to use
Doesn’t have a mobile app
Tivly is an insurance platform with over 20 years of experience in the industry. With Tivly, you can access policies from 200 providers to help you build an excellent Michigan contractor insurance policy. Tivly has an A from the Better Business Bureau. They take a solution-oriented approach. This means they identify problems you have and help you find insurance solutions. Call now to compare quotes over the phone.
Best for: Comparing contractor insurance quotes over the phone
Average cost: $24 per month
Our rating: 10/10
A Fast-growing provider of insurance services
Their policies will scale with the needs of your business
Define the duration of your policy
Limited customer service options compared to other insurers
Thimble is a provider of insurance services that helps you get on-demand coverage for your contractor insurance policies. You can purchase policies and specify the hour, day, and month. Contractors can use this feature to beef up their insurance protection at a moment’s notice.
Best for: Short-term contractor insurance
Average cost: $27 per month
Our rating: 10/10
24/7 Customer service options
Allows you to refund policies within 14 days
Well-known reputation developed over 100 years
Focused on a small business audience
Hiscox is an insurance provider that has a staff of knowledgeable insurance agents. These agents help you determine the needs of your contracting business so you are always aware of the coverage you need. Hiscox has an A from financial rater AM Best.
Best for: Personalized insurance services for contractors
Average cost: $29 per month
Our rating: 10/10
1 / 5
Use anyone except Employers. Period. They are non-transparent and shameful. After I complained long enough to warrant a call from a supervisor, the supervisor called back from a PRIVATE NUMBER (no caller ID), left a message that they are not reversing their decision (without any communication with me), and failed to leave a phone number for me to call back. She was hiding! They also fact find via email and phone calls, which is terrific for speed and communication. However, after setting a precedence of email or phone calls, they send time sensitive information via email, without any heads up... they are hoping you miss it and forfeit via expiration. Evil policies. Go elsewhere.
1 / 5
This place is an absolute joke of a company and should be ashamed of the way they conduct business. I was hurt on the job at the end of July and it took them just shy of 7 weeks to issue out a paycheck to me. Yes the amount was back dated but still. Not many have the luxury of not receiving a paycheck for almost 2 months. To top it all off, the original adjuster marked me down for the wrong state which caused a problem from the get go, I've had 3 different adjusters now since each one can't seem to figure out the simplicity of my claim. All my paperwork which includes, my job, house, and drs visits all are from the same state and city but yet some how I have been filed under a completely different state 1500 miles away. They do not answer your phone calls or emails no matter how many you leave. I've had to escalate my frustrations to the supervisors of each of these individuals in order to even get some kind of response. I've had more communication and information given to me about my claim from the customer service representatives then the actual adjusters.......... please tell me how that works?! A serious overhaul needs to happen here in order to serve your clients the way they deserve to be taken care of. 10/10 do not recommend this company to a single soul on earth
1 / 5
I have never had the displeasure of working with a more incompetent and disrespectful person in my life. I’m an injured worker and the adjuster that was assigned to my case was named Carrie Furgeson. In the past 6 weeks that I’ve been injured and out of work I have only been able to get ahold of her twice, not for lack of trying. I have left countless voicemails, countless emails, and she ignores them all. When I am finally able to get ahold of her I’m greeted with terrible customer service. She is rude, she talks over me and I’m hardly able to get a word in edgewise. She spelled my name wrong on my documents even after I spelled it for her properly countless times, this caused a whole new issue with my bank. I have bill collectors from the hospital calling me demanding payment and Carrie Furgeson won’t do a single thing to help, or to get them paid. All of my documentation is in Colorado, my job is in Colorado, my address is in Colorado, all my Dr offices and appointments have been in Colorado and Carrie still managed to hold my claim because she wasn’t sure what state she needed to file it under. It’s been 6 weeks since my Injury and my company still hasn’t received the wage paperwork to fill out so they can get me my correct wages. When she’s not ignoring me she’s answering my questions with “I don’t know” well I don’t know how she got this job, because apparently she doesn’t know anything about it. She is a disgusting morose individual inside and out and I genuinely wish her the worst in all of her future endeavors. I highly recommend you don’t use this company. Please if you are a business owner and your looking into this company please don’t use them. I’m sure they have the cheapest payment and that’s why companies use them in the first place, but you will be doing your employees a grave disservice by forcing them to venture into this absolute dumpster fire of a company. I would rate 0/5 if possible but 1 was the lowest I was allowed.
5 / 5
Their general liability insurance purchase process is simply the best online experience I've ever had in my life!
5 / 5
As long as they cover your line of business, you're literally covered! best rates, best coverage, best online experience, best professionals, can't be happier that I chose them!
Not all those who wander are lost.
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