When you're starting a Michigan business, insurance can feel like one more cost before you've made a dollar. But the right coverage is what keeps one lawsuit, fire, or injury from ending the business before it gets going — and you don't need everything on day one. Here's what you actually need, what's required, and what can wait.
What Michigan legally requires
- Workers' compensation — required for almost every Michigan employer with employees (generally 1+ working 35+ hours/week, or 3+ at any time). This one isn't optional once you hire.
- Commercial auto — if the business owns vehicles, Michigan No-Fault and registration require coverage. Even using your personal vehicle for the business can require commercial auto.
Most other coverages aren't mandated by the state — but they're effectively required by the people you do business with.
What your clients, landlord, and lender will require
- General liability — the moment you sign a commercial lease, bid a job, or take on a client, you'll be asked for proof of it (often $1M/$2M limits, with the other party named as additional insured). It's the foundation policy.
- Professional liability (E&O) — if you give advice or deliver a professional service, clients increasingly require it before they'll sign.
- Commercial property — if you own or lease space, equipment, or inventory, you'll need to cover it (and your lease likely requires it).
The smart starter stack for most new Michigan businesses
For a lot of small businesses, the most cost-effective starting point is a Business Owner's Policy (BOP) — it bundles general liability and commercial property (and business income) into one policy for 10–20% less than buying them separately. From there you add:
- Workers' comp as soon as you hire.
- Commercial auto if you have business vehicles.
- Cyber liability if you handle customer data (most businesses do).
- Professional liability if you advise or provide a service.
What can wait — and what can't
You can scale into umbrella limits, surety bonds, and specialized coverages as the business grows and contracts demand them. What you can't wait on is the gap that gets you sued or shut down: general liability before your first client or lease, and workers' comp before your first employee's first shift. Going uninsured on those, even briefly, is the risk that ends new businesses.
Match the coverage to your industry
A consultant, a restaurant, a contractor, and a tech startup need very different programs. We've built dedicated coverage for dozens of Michigan industries — from restaurants and contractors to technology, trucking, and cannabis. See all commercial coverages →
The bottom line
Start lean, but don't start naked. Cover the two things that can end the business — liability and workers' comp — get a BOP if you're eligible, and add the rest as you grow. Tell us what you're building and we'll shop 20+ commercial carriers to put together a right-sized program that protects the business without overspending before you've found your footing.