Last Updated on July 6, 2025 by The Insurance Pros
🏢 Michigan Business Insurance: Required Coverage & Smart Protection for 2025
Whether you run a coffee shop in Detroit or a plumbing service in Grand Rapids, business insurance protects your livelihood. In Michigan, some coverage is legally required, while others are highly recommended to protect your assets, employees, and reputation.
- ✅ Required by law: Workers’ compensation, commercial auto insurance
- 🔒 Highly recommended: General liability, commercial property, cyber, BOP
✅ What Types of Business Insurance Should You Consider?
🛠️ Workers’ Compensation (Required)
It provides coverage forvides coverage for employee injuries, lost wages, and legal costs. Michigan law requires this for businesses with one or more full-time workers or three or more part-time workers.
🚗 Commercial Auto Insurance (Required if business owns vehicles)
This insurance covers liability and property damage for vehicles owned by your business. This coverage includes mandatory PIP, PPI, and BI/PD coverage under Michigan’s no-faIt provides protection
🛡️ General Liability (Recommended)
It provides protection against bodily injury, which is essential for businesses that deal with contracts and interact with customers. This coverage is essential; it provides coverage for the repair or replacement of your building, equipment, signage, and inventory following a covered loss.
Commercial Property Insurance
Commercial Property Insurance covers the cost of repairing or replacing your building, equipment, signage, and inventory following a covered loss. Frequently, it is integrated into a Business Owner’s Policy (BOP).
📉 Business Interruption Insurance
Business Interruption Insurance covers lost revenue when a business shuts down due to a covered claim, but standard commercial property coverage does not include this insurance. This coverage typically forms part of a Business Interruption Plan (BOP).
🌊 Flood Insurance
Standard commercial property coverage does not include this coverage. We recommend this coverage for businesses located in flood-prone areas or near lakes/rivers.
See Michigan DIFS Flood Coverage Guide
🔧 Endorsements to Customize Your Michigan Business Insurance
- Employee dishonesty & crime
- Utility interruption & spoilage
- Hired/non-owned auto liability
- Cyber liability for digital breaches
- Pollution/environmental liability
- Inland marine for mobile equipment
📊 What Affects Michigan Business Insurance Cost?
- Type of business & risk class
- Business location (e.g., Detroit vs. rural MI)
- Number of employees & payroll
- Claims history & prior coverage
You may qualify for discounts by bundling policies, staying claims-free, raising your deductible, or completing risk management courses.
Common Michigan Business Insurance questions
❓ Is general liability insurance required by law in Michigan?
Although it’s not mandatory, business contracts, leases, and vendor agreements often require it.
❓ Does my BOP include flood insurance?
No. Businesses near water often recommend purchasing flood insurance separately.
📞 Get Help Protecting Your Business
Do you have questions about the coverages you require? Start with a free custom quote from a Michigan commercial insurance expert.
🔒 Is business insurance required by law in Michigan?
However, most landlords, clients, and lenders require this coverage. Workers’ comp, however, is mandatory if you have employees.
💡 What types of businesses need coverage?
Retailers, restaurants, contractors, consultants, and home-based businesses all need tailored coverage options.
📑 Can I add cyber protection?
Yes. Cyber liability insurance covers incidents such as hacking, ransomware attacks, data breaches, and privacy lawsuits.
