Michigan Apartment and Multi-Family Insurance: The Claims Your Policy Was Never Going to Pay

Own apartments in Oakland, Macomb, Genesee or Lapeer County? Have us review your building schedule →

Michigan apartment insurance has a structural problem that owners discover one claim at a time: several of the exposures that actually generate lawsuits against multi-family owners are not bodily injury and not property damage, which means the general liability policy on your declarations page was never the policy that answered them. Add a brand-new exclusion aimed squarely at habitational risks, and there is more to check on a 2026 renewal than there was on a 2024 one.

The new assault and battery exclusion, and the prong that matters

For decades, assault and battery exclusions on habitational general liability were carrier-proprietary — every one worded differently, with no industry standard to compare them against.

That changed on January 1, 2026, when ISO introduced a standard Exclusion — Assault Or Battery (CG 40 51) for general liability, with a companion form for liquor liability. It excludes bodily injury, property damage and personal and advertising injury arising out of three things:

1. the actual, alleged or threatened assault or battery of any person committed by anyone;
2. acts or omissions by the insured in preventing or suppressing an assault or battery; and
3. negligence or other wrongdoing in the hiring, training, employment, investigation, supervision, monitoring, reporting or failure to report to authorities, or retention of anyone whose excluded conduct caused the loss.

The third prong is the whole ballgame for an apartment owner. That is the negligent-security theory — the claim brought after an assault or a shooting on the property, alleging inadequate lighting, broken gates, an unrepaired lock, or a failure to screen. It is not a claim against the assailant; it is a claim against the owner. An exclusion that reaches negligent supervision and failure to report takes it out.

These exclusions are common in the habitational market, particularly on excess and surplus lines placements. If one is on your policy, read the third prong specifically, and know what you are buying before you decide the premium difference is worth it.

Fair housing is not a general liability claim

This one catches sophisticated owners. The liability policy's Coverage B insures "personal and advertising injury," and that phrase is a closed list of named offenses: false arrest, detention or imprisonment; malicious prosecution; wrongful eviction from, wrongful entry into or invasion of the right of private occupancy of a room, dwelling or premises a person occupies, committed by or on behalf of its owner, landlord or lessor; publication that slanders, libels or disparages; violation of the right of privacy; use of another's advertising idea; and infringement of copyright, trade dress or slogan in your advertisement.

Discrimination is not on that list. Coverage B does not reach a claim simply because it alleges an injury to dignity.

There is one door, and it is narrow: a fair housing complaint that also pleads wrongful eviction, wrongful entry or invasion of the right of private occupancy touches an enumerated offense, because those are on the list. So the coverage answer can turn on how the complaint is pleaded rather than what the case is really about. That is a thin reed to hang a fair housing defense on.

One clarification, because it is a common mix-up. The Employment-Related Practices Exclusion (CG 21 47) is usually attached on habitational accounts and strips injury arising from employment-related practices, naming discrimination explicitly — but it is directed at claims by employees, applicants and former employees. It is not what removes a tenant's fair housing claim; that claim never got onto the Coverage B list in the first place. Some habitational policies carry a separate discrimination exclusion that does reach tenants. Check your schedule of forms for both.

The practical takeaway: a fair housing claim against an apartment owner is not a general liability exposure. EPLI is the right family of product, but a standard EPLI form covers employment claims — reaching tenants generally requires a third-party liability extension, and habitational D&O sometimes picks up part of it. Ask which of your policies names tenants, not just employees. Our post on EPLI in Michigan covers the employment side.

Two Michigan statutes that create liability out of paperwork

The habitability covenant is in your lease whether you wrote it or not

MCL 554.139 writes two covenants into every residential lease in Michigan: that the premises and all common areas are fit for the use intended by the parties, and to keep the premises in reasonable repair during the term and comply with applicable state and local health and safety laws — except where the disrepair was caused by the tenant's willful or irresponsible conduct. The parties can modify those obligations only where the lease has a current term of at least one year, the section is to be liberally construed, and a prospective tenant's chance to inspect before signing does not defeat the covenants.

The point for an owner: your slip-and-fall exposure is not your only habitability exposure. The lease itself is a source of it, by operation of law.

Michigan's Truth in Renting Act then voids a list of lease provisions outright — including a clause exculpating the landlord from liability for the landlord's failure to perform, or negligent performance of, a duty imposed by law (with a limited exception for casualty loss), waivers of remedies for uninhabitable premises, confession of judgment, waiver of a jury trial, and releases of the duty to mitigate. Every lease must also carry a required notice in at least 12-point type, with damages of the greater of $250 or actual damages where the lease contains a provision violating the act, and the greater of $500 or actual damages where it omits a required provision or explicitly violates the act, plus costs and attorney fees. Note the escape hatch: liability attaches only if the landlord fails to correct within 20 days after written notice. The cheapest thing an owner can do is answer that letter.

The practical read for an owner: Michigan limits how far a lease can shift risk back to a tenant, which puts more weight on your liability limit than owners in other states expect. Whether any particular clause in your lease survives is a question for your attorney, not for us.

The security deposit clock no policy will save you from

Michigan caps a security deposit at one and a half months' rent (MCL 554.602), and then imposes deadlines and a form requirement:

• MCL 554.609 — mail the tenant an itemized list of damages within 30 days after termination of occupancy, detailing repair costs and the basis for each assessment. The list must also carry the statutory sentence telling the tenant he must respond by mail within 7 days after receipt or forfeit the amount claimed, in 12-point boldface type at least 4 points larger than the body of the notice.
• MCL 554.613 — within 45 days after termination of occupancy and not thereafter, commence an action for a money judgment. Failure to comply fully "constitutes waiver of all claimed damages and makes him liable to the tenant for double the amount of the security deposit retained."
• MCL 554.611 — running the other direction, and worth knowing. The tenant must give the landlord a forwarding address in writing within 4 days after termination of occupancy, and a tenant who does not relieves the landlord of the obligation to give notice of damages.

Say this part plainly, because it is the most useful thing in this post: we are not aware of a standard liability, property or umbrella form designed to pay double security-deposit damages. It is a statutory penalty for your own procedural failure — not bodily injury, not property damage, not an enumerated offense. This is mostly a discipline problem rather than an insurance problem. Put the 30- and 45-day clocks in your property management system — but note what "comply fully" means: a list mailed on time that lacks the required boldface notice fails the statute just as surely as no list at all. The calendar alone will not save you; the template has to be right too. We would rather tell you that than sell you something that does not respond.

The wiring and panels that get older buildings declined

Much of Michigan's multi-family stock predates 1980, and three electrical issues drive declines and non-renewals on those buildings. Get the facts right, because the internet has them wrong:

• Aluminum branch wiring. The Consumer Product Safety Commission found that homes wired with aluminum wire manufactured before 1972 — "old technology" aluminum wire — are 55 times more likely to have one or more connections reach "fire hazard conditions" than a home wired with copper. Read that precisely: the 1972 date attaches to when the wire was manufactured, not when the building went up, so old-technology wire pulled into a 1974 building is the same exposure. CPSC identifies COPALUM crimp connectors and AlumiConn connectors as the only products meeting its standards for preventing aluminum wire fire hazards — COPALUM requires dedicated tooling and a trained installer, AlumiConn is more widely available, and which one an underwriter will credit is worth settling before you specify a repair on a large building. CPSC stated the finding in terms of homes; the wiring in mid-1960s to mid-1970s apartment construction is the same wiring, and habitational underwriters apply the same view.
• Federal Pacific Stab-Lok panels were never recalled. CPSC closed its investigation in 1983, saying the data available did not establish that the breakers presented a serious risk of injury and that it would not commit further resources — a decision tied to budget and competing priorities, not a finding of safety. No recall was ever ordered. Insurers decline them anyway.
• There is no CPSC recall of Zinsco panels either. They are declined on carrier field experience and loss-control judgment, not on a federal finding.

Enormous numbers of contractor and inspector marketing pages assert an FPE or Zinsco "recall." There is no recall of either brand. Knowing that protects you in two directions: it keeps you from repeating a misrepresentation to a buyer or a tenant, and it lets you have an accurate conversation with an underwriter about what remediation would actually change.

Loss of rents, and the honest way to size it

Rental value coverage is written under the business income forms, and it is one of three mutually exclusive elections on the declarations: business income including rental value, business income other than rental value, or rental value only. For a pure apartment owner, rental value only is usually the right box — and the wrong box is a common, expensive error.

On the period: the period of restoration runs from the date of loss until the property should be repaired with reasonable speed and similar quality — not until your tenants come back. We are not going to hand you a round number of months, because there is no credible benchmark for Michigan multi-family rebuild durations and inventing one would not help you. The honest question is how long your market's contractors and your municipality's permit office would actually take on a building like yours. Buy for that.

The rest of the property side — coinsurance, replacement cost versus actual cash value, ordinance or law, and the 60-day vacancy clause — works the same way it does on any commercial building. Our post on Michigan commercial property insurance for building owners walks through the math, and the vacancy rules matter more here than most owners expect during a repositioning.

A note on requiring renters insurance

Michigan's Truth in Renting Act voids a specific list of lease provisions, and a renters-insurance requirement is not on that list. Whether and how to write one into your leases is a question for your attorney. What we can tell you is what it does for you: a tenant's renters policy covers the tenant's property and the tenant's liability. It does not insure your building, does not respond to your loss of rents, and does not name you as an insured unless you require it. What it actually accomplishes is giving a tenant who negligently starts a fire a source of recovery so your carrier has a subrogation target, and keeping a displaced tenant from having no money and no options — which is what turns a fire into a lawsuit against the landlord. Requiring proof at signing and at renewal is what makes the clause worth anything; an unverified lease requirement is worth nothing.

Frequently Asked Questions

Does my general liability policy cover a fair housing claim?

Generally not. Coverage B insures a closed list of named offenses, and discrimination is not among them. A complaint that also pleads wrongful eviction, wrongful entry or invasion of the right of private occupancy may touch an enumerated offense, so the answer can turn on the pleading rather than the substance. The employment-related practices exclusion usually attached on habitational accounts names discrimination explicitly, but it is aimed at claims by employees and applicants rather than tenants — some policies carry a separate discrimination exclusion that does reach tenants. Fair housing sits in the EPLI and D&O family, and reaching tenants generally requires a third-party liability extension rather than a standard EPLI form.

What is the new assault and battery exclusion?

Effective January 1, 2026, ISO published a standard assault or battery exclusion that carriers can attach to general liability, with a companion form for liquor liability. It excludes injury arising from an assault or battery committed by anyone, from efforts to prevent or suppress one, and — the prong that matters most to apartment owners — from negligence in hiring, training, supervision, monitoring, reporting to authorities or retention of the person involved. That third prong reaches the negligent-security claim brought against the owner.

Does insurance cover Michigan security deposit double damages?

No. Michigan requires an itemized list of damages within 30 days of termination of occupancy and an action within 45 days, and failure to comply fully waives all claimed damages and makes the landlord liable for double the deposit retained. That is a statutory penalty for a procedural failure — not bodily injury, property damage, or a covered offense. No standard liability, property or umbrella policy pays it. The fix is calendar discipline.

Were Federal Pacific or Zinsco panels ever recalled?

No. CPSC closed its Federal Pacific Stab-Lok investigation in 1983, stating the available data did not establish a serious risk of injury and that it would not commit further resources — a resource decision, not a safety finding. No recall was ordered. There is no CPSC recall of Zinsco either. Insurers decline both on field experience. Many contractor marketing pages claim a recall exists; repeating that claim to a buyer or tenant would be a misrepresentation.

How much loss of rents coverage should an apartment owner carry?

Enough to cover a realistic period of restoration for your building in your municipality — which runs until the property should be repaired with reasonable speed and similar quality, not until tenants return. There is no reliable published benchmark for Michigan multi-family rebuild durations, so the useful exercise is asking your contractor and your building department what a full rebuild of your specific property would actually take, then insuring for that. Also confirm the correct rental value election is checked on your declarations.

The bottom line

An apartment program is judged on whether the policy answers the claims you actually get. Three of the most common — a fair housing complaint, an assault in the parking lot, and a security-deposit penalty — sit partly or entirely outside the general liability policy. Knowing which is which is worth more than a percentage point on the premium.

We work best with established Michigan multi-family owners — buildings you have held for a while, real leases and rent rolls, professional or serious self-management, and a few years of loss runs. If that is you, send us your current declarations pages, your full schedule of forms, your rent roll and your last two loss runs. We will tell you whether an assault and battery exclusion is on your policy before we talk about price. As an independent agency representing more than twenty commercial carriers, we can shop a habitational schedule across markets. Call (248) 693-6455 or request a review.