We quote contractor GL in Michigan across 20+ commercial carriers. Get a free contractor insurance quote →
Michigan doesn't mandate general liability insurance for most contractors at the state level. But try pulling a permit, bidding a commercial job, or signing a subcontract without it — you'll hit a wall fast. Here's what Michigan contractors actually need to know about general liability coverage, what it costs, and how to make sure you're protected on every job.
The practical reality: General liability insurance may not be required by law in most Michigan trades, but it's required by nearly everyone you'll work for — homeowners, general contractors, property managers, municipalities, and commercial clients all expect a current certificate before work starts. Without it, you don't get the job.
What General Liability Insurance Covers
General liability (GL) insurance protects your business from third-party claims — meaning claims from people outside your company who are injured or whose property is damaged as a result of your work. The three main coverage areas:
Bodily injury
A customer or bystander is injured at a jobsite where you're working. They sue. GL covers your legal defense and any settlement or judgment — up to your policy limits. This includes injuries that happen during the job and, in many cases, after the job is completed.
Property damage
You or your crew accidentally damages a client's property while working — a tile contractor cracks a countertop, an HVAC tech puts a foot through a ceiling, an excavator clips a gas line. GL covers the repair or replacement cost and your legal exposure if the client pursues damages.
Completed operations
Your work is finished and the client has signed off — but a month later, something you installed or built causes a problem. Completed operations coverage extends your GL protection to claims that arise after the job is done. For contractors, this is one of the most important components of the policy — construction defect claims often surface months or years after project completion.
Michigan-Specific Requirements by Trade
While Michigan doesn't have a single blanket GL requirement, licensed trades have specific minimums set by the state:
| Trade | Required Minimum (Per Occurrence / Aggregate) |
|---|---|
| Licensed Electricians | $500,000 / $1,000,000 (completed operations required) |
| HVAC — Residential | $300,000 / $600,000 |
| HVAC — Commercial | $500,000 / $1,000,000 |
| General Contractors (most trades) | $500,000–$1,000,000 typical; varies by municipality and contract |
| Plumbers | Check with LARA — requirements vary by license type |
Beyond state minimums, most commercial clients and general contractors require $1,000,000 per occurrence / $2,000,000 aggregate as a baseline on their certificates of insurance. If you're bidding commercial work in Michigan, that's typically the floor you need to meet.
What GL Does Not Cover
General liability is essential, but it has clear limits. Michigan contractors often discover these gaps at the worst possible moment — after a claim is filed:
- Your own employees' injuries. That's workers' compensation. In Michigan, if you have three or more employees (or one working 35+ hours/week for 13+ consecutive weeks), workers' comp is legally required.
- Your tools and equipment. GL doesn't cover your own property. You need an inland marine or tools-and-equipment policy for that.
- Your work vehicles. Commercial auto is a separate policy. Personal auto policies typically exclude business use.
- Professional errors or faulty design. If you're providing design services or professional advice, that's professional liability (E&O) territory.
- Intentional acts or contract disputes. GL is for accidents, not disputes over payment, workmanship warranties, or intentional misconduct.
What Does It Actually Cost?
GL premiums for Michigan contractors vary based on trade, annual revenue, number of employees, and claims history. General ranges:
| Contractor Type | Typical Annual Premium |
|---|---|
| Handyman / Low-risk trades | $500 – $1,200/yr |
| Electricians, Plumbers, HVAC | $1,200 – $3,500/yr |
| General Contractors | $2,000 – $6,000+/yr |
| Roofing, Demolition (higher risk) | $4,000 – $12,000+/yr |
These ranges are starting points — premiums climb with revenue and payroll. Higher-risk trades like roofing and demolition carry significantly higher rates due to claim frequency and severity. A clean claims history is one of the most valuable things a Michigan contractor can maintain.
Additional Coverages Most Michigan Contractors Need
GL is the foundation, but a complete contractor insurance program typically includes:
- Workers' compensation — required in Michigan for most operations with employees; also protects sole proprietors if they elect to include themselves
- Commercial auto — if you drive vehicles for work, personal auto won't cover a business-use accident
- Tools and equipment / inland marine — covers your gear on and off the jobsite
- Builder's risk — covers structures under construction against fire, theft, and weather before completion
- Commercial umbrella — extends your GL and auto limits for larger exposures; increasingly required by commercial clients and municipalities
Independent agency advantage: Contractor insurance is one of the most carrier-specific commercial lines products — underwriting appetite, coverage terms, and pricing vary enormously between carriers for the same trade. As an independent agency with commercial lines appointments across 20+ carriers, we can shop your contractor package and find the right combination of coverage and price. One call, multiple options, no runaround.
Frequently Asked Questions
Do I need general liability insurance if I'm a solo contractor with no employees?
Yes. Your liability exposure has nothing to do with whether you have employees — it has to do with the work you perform and what could go wrong. A solo electrician can cause just as much property damage or injury as a 10-person crew. Most permit offices, general contractors, and homeowners won't let you on the job without a current GL certificate regardless of your business size.
What is a certificate of insurance and why does everyone ask for one?
A certificate of insurance (COI) is a one-page document from your insurer that summarizes your active coverage — policy type, limits, carrier, and effective dates. General contractors, property owners, and municipalities request them before allowing you to work on their projects. It's proof that you have coverage and that they won't be left exposed if something goes wrong. Your insurer or agent can generate one quickly when you need it — usually within a day.
What does "additional insured" mean on a contractor policy?
When a general contractor or property owner asks to be listed as an "additional insured" on your policy, they're asking for protection under your GL coverage if they're named in a lawsuit arising from your work. It's a standard request on commercial jobsites and in most subcontracts. Your insurer adds them via endorsement — your agent handles this when you request a certificate for that specific job.
My general contractor said I need $2 million in coverage. How does that work?
The $2 million figure typically refers to your aggregate limit — the maximum your policy pays across all claims in a policy year. Your per-occurrence limit (the most paid for any single claim) is usually $1 million. A $1M/$2M policy structure is the standard requirement for most Michigan commercial subcontract work. If your current policy has lower limits, we can adjust them — often for a modest premium increase.
Does GL cover damage to the work itself, or just damage I cause to other things?
Standard GL excludes damage to your own work — the specific work product you delivered. It covers damage you cause to other people's property while doing your job. For example: an HVAC contractor accidentally cracks a homeowner's hardwood floor — that's covered. But if the HVAC unit they installed fails and needs to be replaced — that's a workmanship issue, not a GL claim. Completed operations covers injury or property damage caused by your completed work, but not repair or replacement of the work itself.