Short answer: In Michigan, the main insurance requirements for a small business are workers' compensation and auto liability. Workers' comp: at three or more employees at one time, or one employee working 35+ hours a week for 13+ weeks. Business vehicles need at least the state minimum of $50,000/$100,000 bodily injury (if you choose below the $250,000/$500,000 default), $10,000 property damage, plus no-fault PIP and $1 million property protection insurance.
This guide is general information for Michigan employers and business owners. It isn't legal advice. Agency rules change, so confirm with the agencies linked below.
1. Workers' compensation
Michigan uses two tests. A private employer needs coverage if it regularly employs three or more people at one time, or if even one employee has worked 35+ hours a week for 13 weeks or longer in the past 52 weeks. Details: is workers comp required in Michigan.
2. Business vehicles
Per the Michigan auto insurance FAQ, the minimum auto liability is $50,000/$100,000 bodily injury (if you choose below the $250,000/$500,000 default), $10,000 property damage, plus no-fault PIP and $1 million property protection insurance. Business vehicles often need higher limits for contracts, leases and lenders. See commercial auto insurance.
3. No-fault choices
Michigan is a no-fault state. Policies include PIP, property protection insurance (PPI) of up to $1 million for damage to others' property in Michigan, and residual bodily injury and property damage liability. The $250,000/$500,000 bodily injury limit is the default unless you sign a form choosing lower limits. Businesses should review those choices carefully.
State unemployment insurance
Unemployment insurance is the other employer coverage Michigan makes mandatory. Per the U.S. Department of Labor's Significant Provisions of State UI Laws, January 2026, Michigan employers are covered once you meet the coverage test of 20 weeks or $1,000 in a calendar year. The 2026 taxable wage base is $9,000 ($9,500 for delinquent employers) per employee. Experience-rated employers pay 0.06% to 10.3%, and new employers start at a base rate of 2.70% (higher rates can apply by industry). Register with the state's unemployment tax agency when you hire.
Beyond the mandates
Most other coverage, like general liability, property, professional liability and cyber, comes from contracts, leases and lenders rather than Michigan law. See small business insurance by industry or home-based business insurance. For-hire interstate carriers also face federal minimums under 49 CFR 387.9, starting at $750,000.
Questions? Contact Alishahi Insurance or call (877) 711-4545. See insurance in Michigan.
Frequently asked questions
When does a Michigan business need workers' comp?
At three or more employees at one time, or one employee working 35+ hours a week for 13+ weeks.
What's the minimum auto insurance for a Michigan business vehicle?
$50,000/$100,000 bodily injury (if you choose below the $250,000/$500,000 default), $10,000 property damage, plus no-fault PIP and $1 million property protection insurance.
Do Michigan employers have to pay for unemployment insurance?
Yes, once covered. The 2026 taxable wage base is $9,000 ($9,500 for delinquent employers), and new employers start at 2.70%.
Alishahi Insurance · 439 N Canon Dr, Penthouse, Beverly Hills, CA 90210 · (877) 711-4545 · CA License #4348151. General information only. This isn't legal, tax or financial advice or a coverage determination. Coverage depends on policy language and underwriting, and rules vary by state.