Business Insurance in Michigan: Costs, Benefits, & Who Needs It?
There are 902,000 small businesses in Michigan that employ almost 2 million people. These businesses are required to protect their business with the right insurance. And it is no wonder they are required to cover their assets because many situations can financially hurt your business.
So what is business insurance in Michigan, and how can it protect local businesses? Michigan business insurance includes different policies, from general liability to cyber insurance policy, that protect you from lawsuits and other risks during work hours.
In this article, we will discuss what this insurance covers, how much it costs, whether it is required, who needs it, and more!
What Is Business Insurance in Michigan?
Michigan business insurance helps you cover your finances and property if someone sues you for bodily injury or damages. There are many other risks that businesses face every day, from cyber attacks to theft, and we will explain them in the “Types of Small Business Insurance” section. Business insurance in Michigan is also called business liability insurance and commercial general liability insurance.
Types of Small Business Insurance Offered in Michigan
Here are the different types of policies that are offered to businesses in Michigan:
General Liability Insurance
General liability in Michigan is this state’s most common type of small business insurance. It covers the businesses in case of a third-party bodily injury, property damages, and advertising injuries.
Commercial Auto Insurance
This type of Michigan business insurance protects the vehicles and trailers you use for business purposes. Commercial auto insurance is useful because your personal auto policy doesn’t cover vehicles you use for commercial purposes.
Workers’ Compensation Insurance
Workers’ comp insurance is required by Michigan law. In Michigan, all employees must have this policy as it covers expenses related to employee injuries that occurred while they were doing their job.
Business Owners Policy
Business owners policy or BOP is another Michigan commercial insurance that includes property and liability coverages in one insurance policy. Business owners’ policy is often recommended to small and medium businesses with commercial property (rented or their own).
Professional Liability Insurance
This type of insurance is usually recommended to businesses that offer professional services (for example, consulting companies). This type of Michigan liability insurance protects businesses in case their clients sue them for professional negligence and covers their defense costs. Professional liability insurance is also known as errors and omissions insurance (E&O).
This policy covers businesses in case of a cyber attack or a data breach. Cyber insurance covers data recovery expenses, legal costs, and even investigative services. This policy is recommended for businesses that work with customer data, such as credit card information.
How Business Insurance in Michigan Works
Business insurance in Michigan covers business owners in case of unexpected financial losses. If a business faces an unforeseen event, such as property damage, business insurance covers the losses and allows them to keep working.
All you need to do is to report the event to your insurer, and you will start the process of covering your losses, depending on the policy that you have. Experienced insurance agents at East Insurance Group will lead you through this process and provide you all the information you need.
Is Business Insurance Required in Michigan?
In Michigan, businesses are only required to have Workers’ Comp Insurance. Private business owners must have business insurance if they have one or more employees who work more than 35 hours per week.
What is Required for Professional Liability Insurance in Michigan?
Although general liability insurance and professional liability policy aren’t required in Michigan, many businesses ask for these coverages and these policies are even specified in their contracts as one of the requirements to start working with them.
Besides Workers’ Comp Insurance, all commercial vehicles in Michigan must have commercial auto insurance. Michigan law requires personal injury protection and bodily injury protection:
- $50,000 liability for bodily injuries per person
- $100,000 liability for bodily injuries per accident
- $10,000 for property damages in a different state
- $250,000 for personal injury protection
How Much Does Liability Insurance Cost in Michigan?
On average, business insurance costs in MI between $100 and $1000 per year and about $27 per month. The cost of business insurance in Michigan depends on several factors, including:
- The type of industry you’re in
- The business location
- Your claims history
- The deductibles you choose
- The number of employees
- The number of vehicles
How to Lower the Costs of Small Business Insurance in MI?
There are ways to lower the costs of your insurance premium. Here’s how you can do it:
- Minimize risks: Introduce safety training and risk management programs that will minimize the chances of having to make a claim.
- Improve security: Add fire sprinklers, security cameras, and even driver training programs. All of this shows that you are doing everything in your power to increase security in the workplace.
- Review policies annually: Make sure to call your insurance agents once a year and see if there is space for some adjustments to your policies.
- Pay premiums up front: You can also lower your business insurance costs by paying the entire premium upfront.
- Ask for a discount: You never know what you can get if you don’t ask! Always ask for a discount when negotiating business insurance. One of the useful tips is to ask trade associations in your specific industry for different ways to lower your premiums.
Examples of Business Insurance in Michigan
Here are a few examples of costs for business insurance for contractors and construction businesses:
General liability insurance in Michigan costs about $69 per month or $825 per year. With this policy, your business is covered in case of third-party bodily injuries, advertising injuries and property damages.
On the other hand, construction businesses and contractors usually pay about $150 per month or $1,1830 per year for commercial auto insurance. As we mentioned above, commercial auto insurance covers property damages and medical bills in accidents and damages caused by weather, theft, and vandalism.
Who Needs Business Insurance in Michigan
Even if you are not required to purchase a business insurance policy in Michigan, it’s a good idea to consider having it because you never know whether you will face an unfortunate event. You might have to pay a lot of money unexpectedly. While all business owners should think about having this policy, some common professions could especially benefit from having business insurance:
- Dry cleaning
Why East Insurance Group?
With East Insurance Group, you will work with our experienced agents ready to provide you with any information you need. You can expect an offer crafted according to your specific needs and get the best rates! You can fill out our simple form or call us – whatever you choose, we will respond to you shortly.
At East Insurance Group, we have helped over 50,000 small businesses all over the US. Now we are ready to help you.
Business Insurance in All Cities in Michigan
You can get our insurance in all Michigan cities, including:
- Ann Arbor
- Grand Rapids
Finally, while business insurance in Michigan isn’t required by law (except workers’ comp insurance and commercial vehicle insurance) it might be a good idea for all business owners to think about having this policy as it can help you cover many unexpected costs, from cyber attacks to property damages to your company truck.
Are you still confused about business insurance in Florida, or do you need some help with getting a quote for your business?Contact us today and get all the information you need fast and for free!
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