Understanding Michigan Liability Insurance Coverage

Understanding Michigan Liability Insurance Coverage

No matter what kind of business you run, you need protection against all kinds of threats, including lawsuits. General liability is a crucial part of any business insurance package and an affordable way to protect your Michigan business. 

What is General Liability Insurance?

General Liability insurance protects a business against lawsuits and claims arising from bodily injury, property damage, or reputational harm. Liability insurance reimburses policyholders for the legal costs, including attorney, court, and settlement fees, regardless of whether they are at fault or not and is often required by state law, industry regulations, or your clients.


  • Bodily Injury/Property Damage: Claims of damage caused by your actions to a third party.
  • Advertising Injury: Allegations that you libeled or slandered someone or violated their rights.
  • Reputational Harm: Claims that you damaged the reputation of a business.

Who Needs General Liability Insurance Coverage?

A general liability policy covers a wide range of exposures across various industries. 

Companies that purchase general liability insurance:

  • Contractors that work on or at a third-party property
  • Businesses that market via advertising
  • Businesses that meet with clients face to face
  • Businesses that are legally required to maintain general liability coverage

General Liability Insurance Coverage

What Does General Liability Insurance Cover?

The following scenarios are typically covered by general liability, as detailed on TrustedChoice.com:

  • Claims relating to bodily injury: If a third party, such as a customer, slips and falls on your business premises or otherwise injures themselves and blames you, general liability insurance will reimburse for legal costs.
  • Claims relating to property damage: If a third party, such as a customer, claims to have had their personal property damaged due to your business, general liability will reimburse for legal costs.
  • Claims relating to advertising injury: If your business’s advertisements cause some sort of harm to a third party, such as emotional harm, general liability insurance will cover the legal costs.
  • Medical payments: General liability insurance will also cover medical costs stemming from injured third parties on your business premises or who claim to have been injured by your business’s operations. Coverage kicks in regardless of actual fault.

Why is Liability Coverage Important?

Without proper liability protection, your business could go bankrupt after just one hefty lawsuit, which could be impossible to predict. In addition, general liability insurance proves your reliability and trustworthiness, which could give you a competitive edge over companies without insurance. Often, businesses will require you to provide a certificate of insurance before starting work for them. Commercial landlords may also require a general liability certificate as proof your company is financially protected against property damage.

Liability Insurance Cost

Liability insurance for Michigan businesses can range in price depending on numerous factors and businesses are often rated based on the unique risks they face.

Other cost factors may include:

  • Industry type
  • Location
  • Number of employees
  • History of claims
  • Annual profits
  • Additional coverages

Other Consideriderations

Keep in mind that general liability insurance is just one type of coverage needed as you may have liability risks beyond the scope of general liability insurance.

Commercial general liability insurance (CGL) can be purchased either as a stand-alone policy or as part of a business owner’s policy (BOP). 

Depending on the type of work you do, you might need additional policies:

Commercial Umbrella Insurance: Provides additional protection for high-risk businesses. Under umbrella insurance, your policy limit is increased, meaning your insurer can cover more expensive lawsuits. 

Professional Liability Insurance: Protect your business from consequential loss resulting from negligence claims associated with your professional service. Professional liability claims involve allegations whereby the customer alleges they lose revenue or incurred expense because of the negligent rendering of professional services. 

Workers Compensation Insurance: Worker compensation insurance gives your employees benefits to help recover from a work-related injury or illness. It can also benefit your employee’s families if they lose their lives in a workplace accident.

Cyber Liability Coverage: Cyber-related losses generally involve loss or damage to data and other intangible assets, including customer data and intellectual property and the host of related expenses associated with a loss event. 

To learn more about key business owners’ policies, check out our guide to Understanding Business Insurance.

Advantages of Independent Agents

When you research your options for purchasing general liability insurance, you will encounter the terms’ independent agent’ and ‘captive agent.’ Captive agents work for only one insurance company. An independent agent represents multiple insurance companies, which means their primary focus is on you, not the carrier.

There is no one more qualified to help your business find the best liability coverage than an independent insurance agent. Independent agents search multiple carriers to find providers that sell liability insurance, deliver quotes from a number of sources and help you compare to find the best combination of coverage and cost.

Have More Questions?

Mason-McBride’s independent agents specialize in business risks and design a customized policy keeping your best interests in mind. For more information about Commercial Insurance or to review coverage options, please contact us.

For helpful tips on other popular topics, check out articles on Commercial Crime Insurance, Ransomware Developments, and Social Engineering.

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