If you’re a contractor or construction business owner in Michigan, having the right insurance coverage is essential — not just to stay compliant, but to protect everything you’re building.
Whether you’re a solo tradesperson or managing a growing crew, contractor insurance isn’t one-size-fits-all. But there are core policies that most Michigan contractors need, plus optional coverages that can become critical depending on how you operate.
Below is a clear, high-level breakdown of
the most important insurance policies contractors should consider in Michigan.
General Liability Insurance for Contractors
General liability insurance is the foundation of almost every contractor insurance program.
This policy helps protect your business if you’re held responsible for:
- Bodily injury to a third party
- Property damage caused by your work
- Legal defense costs, even if a claim is groundless
Products & Completed Operations
For contractors, one of the most important parts of general liability is
Products & Completed Operations coverage.
This protects you if:
- A job you completed later causes damage or injury
- A client claims faulty workmanship after the project is finished
Many contracts, lenders, and municipalities require general liability before you can even start work.
Workers’ Compensation Insurance in Michigan
If you have employees in Michigan, workers’ compensation insurance is
legally required.
Workers’ comp helps cover:
- Medical bills for injured employees
- Lost wages during recovery
- Rehabilitation services
- Employer liability protection
Even small crews or part-time workers can trigger workers’ comp requirements, so it’s critical to get this right.
Commercial Auto Insurance (and Hired & Non-Owned Auto)
If your business owns vehicles — trucks, vans, or specialty vehicles — you’ll need
commercial auto insurance.
Commercial auto typically covers:
- Bodily injury and property damage liability
- Physical damage (collision and comprehensive)
- Michigan-specific coverages like Personal Injury Protection (PIP)
Hired & Non-Owned Auto Coverage
Even if you don’t own vehicles,
Hired & Non-Owned Auto coverage is extremely important for contractors.
This helps protect your business if:
- An employee drives their personal vehicle for work
- You rent or borrow vehicles for a job
This coverage is often overlooked — and often required by contracts.
Umbrella Insurance for Contractors
An umbrella policy provides
additional liability limits on top of your existing policies.
For example:
- Your general liability policy might cap at $1 million
- An umbrella policy can add $1–5 million or more
Umbrella insurance is especially valuable if:
- You work on larger commercial projects
- You sign contracts with higher liability requirements
- You want protection from severe or catastrophic claims
Inland Marine Insurance (Tools, Equipment & Materials)
Despite the name, inland marine insurance has nothing to do with water.
For contractors, it’s designed to protect:
- Tools and equipment
- Mobile machinery
- Materials in transit or at job sites
- Leased or rented equipment
Standard property or liability policies usually do not cover these items adequately.
Other Important Contractor Insurance Coverages
Depending on your operation, you may also need:
Builder’s Risk Insurance
Covers buildings under construction, including materials, supplies, and fixtures during the build.
Commercial Property Insurance
Protects owned buildings, warehouses, or office space and business personal property.
Professional Liability (E&O)
Important for contractors involved in design, consulting, or project management decisions.
Employment Practices Liability (EPL)
Helps cover claims related to wrongful termination, discrimination, or harassment.
Cyber Insurance
Increasingly important for contractors who:
- Store client data digitally
- Accept electronic payments
- Rely on email, software, or cloud systems
How Much Contractor Insurance Do You Need?
The right coverage depends on:
- Your trade and scope of work
- Number of employees
- Vehicles and equipment
- Contract requirements
- Project size and risk exposure
Most contractors should think beyond “what’s cheapest” and focus on
proper protection and contract compliance.
Final Thoughts: Contractor Insurance in Michigan
Contractor insurance in Michigan doesn’t have to be complicated — but it does need to be done correctly.
Starting with the right foundation and layering coverage based on how your business actually operates can help protect your livelihood, your reputation, and your future growth.
If you want help reviewing your contractor insurance or making sure your coverage matches your real-world risk, working with a knowledgeable, Michigan-based independent agent can make a significant difference.
