Do I need workers compensation insurance?

Workers Compensation Insurance Requirements in Michigan

In Michigan, businesses need to understand when workers compensation insurance is required to ensure compliance and protect their operations.

When Workers Compensation Insurance is Required

• Employers with One or More Employees: As of 2026, Michigan law generally requires all employers with one or more employees to carry workers compensation insurance. This includes full-time, part-time, and seasonal workers.
• Construction Industry: Contractors and subcontractors must maintain workers compensation insurance regardless of the number of employees.
• Corporate Officers and Sole Proprietors: Coverage for corporate officers is optional but can be elected. Sole proprietors and partners are not required to have coverage unless they choose to include themselves.

Operational Considerations

• Insurance Providers: Obtain workers compensation insurance from authorized insurers or through the Michigan Workers’ Compensation Placement Facility if coverage is hard to find.
• Payroll and Recordkeeping: Maintain accurate payroll records to calculate premiums based on employee wages and job classifications.
• Compliance and Reporting: File necessary reports with the Michigan Workers’ Compensation Agency and keep certificates of insurance on file.
• Employee Classification: Properly classify employees to determine correct premium rates and avoid compliance issues.
• Integration with Other Insurance: Coordinate workers compensation insurance with general liability and unemployment insurance for comprehensive risk management.

Summary

Most Michigan employers must carry workers compensation insurance if they have employees. Ensure your business obtains appropriate coverage, maintains payroll and classification records, and complies with state reporting requirements to protect your workforce and business operations effectively.