What insurance is required before hiring employees?

Required Business Insurance Before Hiring Employees in Michigan

Before hiring employees in Michigan, businesses must secure specific insurance coverages to comply with state regulations and protect their operations.

Workers' Compensation Insurance

Workers' compensation insurance is mandatory for most Michigan employers with one or more employees. This insurance covers medical expenses and lost wages if an employee suffers a work-related injury or illness. Ensure your policy meets Michigan's requirements before the first employee starts work.

Unemployment Insurance

Employers must register for unemployment insurance through the Michigan Unemployment Insurance Agency. While not a traditional insurance policy you purchase, this program requires employers to pay unemployment taxes to fund benefits for eligible former employees.

Additional Insurance Considerations

• General liability insurance is not required by law but is recommended to protect against third-party claims.
• Commercial auto insurance is necessary if employees will drive company vehicles.
• Health insurance may be required under federal regulations depending on business size, so plan accordingly.

Operational Tips

• Confirm your workers' compensation coverage before onboarding employees to avoid penalties.
• Register with the Michigan Unemployment Insurance Agency promptly after hiring.
• Maintain accurate payroll and employee records to support insurance and tax reporting requirements.
• Consider consulting with an insurance broker to tailor coverage to your business needs.