Michigan requires nearly all employers with one or more employees to carry Workers' Compensation coverage, although approved businesses may self-insure. Sole proprietors are considered to be self-employed and therefore are not subject to Workers’ Compensation coverage requirements in Michigan.
As in other states, railroad workers and federal employees are exempt from Michigan Workers' Compensation required coverage. Sole proprietors are not considered to be employees and are not required to carry workers compensation coverage for themselves.
Michigan recommends two separate posters for display in a conspicuous public area in the workplace which detail employee rights as well as responsibilities in regard to Workers’ Compensation coverage and workplace injuries.
Failure to carry Workers' Compensation coverage in Michigan can expose businesses to civil lawsuits due to workplace injuries or work-related illnesses. Additionally, employers can be fined $1,000 or imprisoned for no less than 30 days, or both. Michigan considers each day for which an employer is uninsured as a separate offense.
What if I am self-employed in Michigan? Do I need Workers' Compensation?
In most cases, the employees of a sole proprietorship in Michigan are required to have Workers' Compensation coverage. The owner, however, is not considered to be an employee and is not required to have coverage for Workers' Compensation.
Where can I buy Workers' Compensation in Michigan?
Michigan is not a monopolistic state and it does not have a state fund for insurance, making open market providers your source for Workers' Compensation coverage in Michigan. You can purchase coverage through insurance agents or brokers licensed to sell business insurance within the state. Online portals, such as CoverWallet, can be a valuable resource to purchase Workers' Compensation coverage along with other essential insurance coverages for your business.
How Much Does Michigan Workers' Compensation Cost?
Michigan, along with a handful of other states, uses an independent bureau to help assign Workers' Compensation class codes to business industries based on risk. The class code assigned to your business, combined with your safety or claims history and your payroll all play a role in determining the rate for your business. CoverWallet can give you a quote.
What Does Michigan Workers' Compensation Cover?
Workers' Compensation coverage in Michigan provides wage replacement for lost wages due to workplace injuries, as well as medical and rehabilitation benefits for workers who suffer a work-related injury or occupational illness. Wage replacement is typically about 80% of your after-tax earnings but may vary.