Michigan Workers Compensation

You went into business for yourself to build something, make a better future for yourself and your family, and maybe even to help others along the way. Without the proper protection, one on-the-job accident could wipe out everything you’ve worked for. Workers compensation may be required by law in Michigan for most businesses, but it also makes good business sense, as well.

What is Workers Compensation Coverage?

Workers compensation is insurance coverage that protects both you and your employees. Lost wages and medical bills are covered for injured or sick employees. In the event of a death, benefits can be paid to survivors. As the employer, you’re protected from lawsuits when something goes wrong.

Premiums are based on the type of jobs your employees perform and how much they are paid. You can help control your costs by reducing accidents through safety programs, as well as safety policies and procedures. The more claims you have, the higher the cost.

Workers Compensation in Michigan

Workers compensation is a requirement across the country. Every state has different rules and requirements. If you have a business in Michigan or employees who travel to Michigan to work, you need to understand Michigan’s workers compensation rules.

  • In Michigan, any business with one full-time employee or three or more employees at any one time, part-time or full-time, is required to carry workers compensation coverage.
  • Independent contractors are not covered under workers comp in Michigan. However, if someone works for your company without maintaining a separate business or offering their services to the public, they are considered an employee.
  • Michigan has a private insurance market which allows you to purchase workers comp coverage from an insurance company or agent licensed in Michigan.
  • There is a state fund that competes with the private market. It accepts higher risk businesses but charges higher rates.
  • Sole proprietors are exempt from workers compensation coverage. They may also exclude spouses, children, or parents who are employees of the business.
  • Partners are included in coverage but may opt out.
  • Corporate officers are included in coverage but may opt out as long as they own at least 10 percent of stock in the company and all employees are corporate officers.
  • Members of LLCs are included but may opt out if they own 10 percent or more of the business and all other employees are members of the LLC.
  • Employers choose the initial physician for an employee to see. After 28 days, the employee may choose their own doctor.
  • There is a seven day waiting period after an injury to receive benefits. In Michigan, workers compensation benefits can be applied retroactively if the injury persists for two or more weeks.
  • Self insurance is available for financially sound companies that meet specific requirements.
  • Businesses who fail to provide required workers compensation coverage can face fines of $1000 per incident, imprisonment of 30 days to six months, or both. Each day of non-compliance counts as one incident.


A Michigan workers compensation insurance policy is more than a legal requirement, it’s protection for both you and your employees. The team at America’s Workers Compensation is ready to answer any questions you have about your current coverage or provide a quote. Contact us today. We’re here to help!

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