Who is required to carry it
Michigan’s Workers’ Disability Compensation Act generally requires coverage for private employers that regularly employ one or more people for 35 or more hours a week for 13 weeks or longer in a 52-week period, or that employ three or more people at any one time. Sole proprietors and partners with no employees are generally not required to cover themselves, and there are rules about excluding certain officers and family members. The state’s Workers’ Disability Compensation Agency publishes the current details; treat them, not this page, as the authority.
What it pays
Medical care for a work-related injury or illness, a portion of lost wages during recovery, and benefits for lasting disability or death. In exchange, it is generally the employee’s exclusive remedy against the employer — which is why carrying it protects the business as much as the worker.
How it is priced
Premium is payroll multiplied by a rate for each class code — the classification of the work being done — adjusted by an experience modifier once the business has enough history. A roofer and a bookkeeper on the same payroll have very different rates. Getting the class codes right and separating payroll by task is where most of the pricing accuracy comes from.
Subcontractors and the audit
If you hire subcontractors who do not carry their own workers’ comp, their payroll can be charged to your policy at audit. Collect a certificate from every sub. At the end of each policy year the carrier audits actual payroll against the estimate and bills or credits the difference — keep payroll records by class code so the audit is quick.
Sources: Michigan Workers’ Disability Compensation Agency
This guide is general information about insurance in Michigan, not advice about a specific policy. Coverage depends on the policy’s terms, limits, exclusions and eligibility, and a request does not bind or change insurance.