General Contractor Insurance in Michigan

If you have a physical location with a commercial lease, your property manager may require you to purchase general liability insurance.

Commonly purchased by general contractors in Michigan, general liability insurance can protect your business from expenses associated with common mishaps, such as customer property damage and injuries.

Contractor general liability insurance can also help protect against advertising injuries, such as libel, slander, and copyright infringement.

So, for example, if an unhappy customer writes negative and untrue reviews online, you can have the legal recourse to fight the allegations and protect your reputation.

To meet state requirements in Michigan, most general contractors with employees must provide workers’ compensation insurance, which covers lost wages and medical bills for work injuries.

Michigan laws are less straightforward than most states, and not all employers need workers' compensation.

For example, businesses that hire part-time employees for less than 13 weeks per year (52 weeks), or have less than three employees at one time may be exempt from the requirement.

That being said, it is highly encouraged for all general contractors to carry this insurance policy to protect employees, subcontractors, and the business itself from the high costs of workplace injuries and potential legal fees that result from an accident or incident.

Even if your business doesn't have employees, you can still get workers' comp to protect yourself from if you're injured on the job and incur costly medical expenses.

Commercial auto insurance protects vehicles owned by your general contracting company. It covers property damage and medical bills resulting from an accident, along with vehicle theft, weather damage, and vandalism.

Minimum auto liability requirements for Michigan businesses are:

• $50,000 per person in bodily injury liability
• $100,000 per accident in bodily injury liability
• $250,000 personal injury protection
• $10,000 in property damage in another state

You may want to consider additional coverage, depending on the kind of work you do and the vehicles you own.

The Michigan Department of Transportation (DOT) may require those with a DOT serial number, including semi-trucks, to carry additional coverage.

For automobiles that are used for the business but are leased, rented, or otherwise not owned by the company, you'll need a separate policy called a hired and non-owned (HNOA) policy. Personal auto insurance will typically not cover accidents or incidents that occur during work-related activities.

If you plan on transporting expensive equipment to and from construction sites, you may want to consider inland marine insurance.

Licensure requirements in Michigan sometimes include a surety bond, depending on the type of work you do.

A surety bond guarantees reimbursement for the client if a general contractor fails to fulfill the terms of a contract or adhere to building codes. Common types of surety bonds include bid bonds, performance bonds, and payment bonds.