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Do I Need Work Comp Insurance?

Retailers Insurance Company - Wednesday, December 21, 2011

In Michigan, all private employers must have work comp coverage if:

  • They regularly employ three or more workers at one time; or

  • During the preceding 52 weeks they have regularly employed at least one worker for 35 hours or more per week for 13 weeks or longer.

All public employers must have coverage.

Any other employer can voluntarily choose to buy work comp coverage. By doing so, the employer is protected against being sued in the event a worker is injured on the job.

Michigan has special provisions that apply to contractors, subcontractors and sole proprietors. Details on these provisions are available here.

So, why do I need coverage?

Work comp is an employee’s “exclusive remedy” to offset the paid and lost time of a work-related injury or illness. In exchange for prompt payment of wage-loss benefits and medical treatment, employees give up the right to sue their employers for damages.

From the employer’s perspective, work comp provides protection against the potentially ruinous cost of lengthy lawsuits filed by injured employees. Damages for such suits could reach into the millions of dollars.

In fact, even employers who may be exempt may find that voluntarily providing work comp benefits is the best way to protect workers and the business against the costs of work-related injuries.

Employers forfeit the protections of the work comp laws when they deliberately cause injury to an employee. An employer is considered to have intended an injury if the employer knew that an injury was “certain to occur and willfully disregarded that knowledge,” according to the law.


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