Workers' Compensation Insurance for General Contractors in Michigan (2026 Guide)

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Workers' Compensation Insurance requirements for General Contractors in Michigan

Michigan requires employers to carry workers' compensation when they regularly employ three or more workers at one time, OR one or more workers for 35 or more hours per week for 13 or more weeks during the preceding 52 weeks. The Workers' Disability Compensation Agency (WCA) within the Michigan Department of Labor and Economic Opportunity administers the system. Michigan operates outside NCCI through its own data and EMR system.

Rate setting: Independent state bureau (Michigan Workers' Disability Compensation Agency (WCA))

Typical 2026 cost range: $2,400–$16,000 per $100,000 of qualifying payroll. Final premium depends on class-code mix, experience modifier, and underwriting credits.

Classification codes for General Contractors in Michigan

Code	Description	Base rate (per $100 payroll)
`5403`	Carpentry NOC	,
`5645`	Carpentry — detached one or two family dwellings	,
`5651`	Carpentry — dwellings, three stories or less	,
`5606`	Contractor executive supervisors	,

Michigan uses NCCI-aligned class codes but maintains its own intrastate experience rating system through the WCA. Coverage is purchased from private carriers in the voluntary market or from the [Michigan Workers' Compensation Placement Facility](https://caom.com/) (the residual market). Coverage filings are made with the Insurance Compliance Division. WC-337 Notice of Exclusion forms are required for any owner electing exclusion (call WCA at 517-284-8922 to obtain forms — not available online).

What Michigan's threshold rule actually means

Michigan applies a more complex threshold than most states. Under the Michigan Workers' Disability Compensation Act, coverage is required when an employer regularly employs:

Three or more workers at one time, OR
One or more workers for 35+ hours per week for 13+ weeks during the preceding 52 weeks

The second prong catches small construction operations that use a single dedicated full-time worker — even a sole-prop GC with one full-time employee triggers coverage if that employee works 35+ hours per week consistently. This rule effectively brings most ongoing GC operations into the coverage requirement regardless of the three-at-once test.

The WC-337 exclusion mechanism

Michigan's Workers' Disability Compensation Agency (WCA) administers a unique exclusion process. Owners who want to opt out of coverage on themselves must file WC-337 Notice of Exclusion — not available online, must be obtained by calling the WCA at 517-284-8922.

Exclusion eligibility is limited:

Sole proprietors with no employees: Cannot use WC-337 (form returned by Agency). Sole props are simply not required to carry self-coverage and have no exclusion to file.
Sole proprietors with employees who are all family members (spouse, child, parent): Can use WC-337
Partners in a partnership: Can use WC-337 if all employees are partners
Corporate officers in stock corporations: Can use WC-337 only if all employees are corporate officers AND each owns at least 10% of stock AND the corporation has 10 or fewer shareholders
LLC members: Can use WC-337 only if all employees are members/managers AND each owns at least 10% interest

The 10%-ownership rule is unusual among states and is one of the principal reasons family-owned Michigan GCs structure their entities to maximize officer coverage exclusion.

The Michigan Workers' Compensation Placement Facility

Michigan operates a residual market through the Michigan Workers' Compensation Placement Facility. Contractors who cannot obtain voluntary-market coverage are placed with assigned-risk carriers through the Facility. The Facility's rules around independent contractor verification (Bulletin 89-03) are particularly detailed for construction businesses — sole-proprietor subcontractors with no employees require specific documentation (FEIN, written contract, IRS 1099 evidence, list of other contracts) to avoid being charged as employees on the principal contractor's policy at audit.

Class codes for Michigan GCs

Michigan uses class codes that align with NCCI nomenclature but maintains its own intrastate EMR system through the WCA. General contractors typically have:

Code 5606 — Contractor executive supervisors
Code 5403 — Carpentry NOC
Code 5645 — Carpentry, detached one or two family dwellings
Code 5651 — Carpentry, dwellings three stories or less
Code 8810 — Clerical office

Classification accuracy is verified at audit. Sole-prop and 10%-officer minimum payrolls apply when these owners are included on coverage: 2024 minimum was $24,900 for sole props/partners, $3,616 minimum to $124,800 maximum for non-excluded officers and LLC members.

IRS-20 Factor Test for misclassification

Michigan applies the IRS-20 Factor Test for independent contractor classification. This is more granular than the ABC tests used in some other states — twenty separate factors are evaluated, with right-to-control as the primary consideration.

Misclassification investigations are handled jointly by the WCA and the Michigan Department of Insurance and Financial Services (DIFS). Findings of misclassification result in retroactive premium chargebacks, interest, and potential civil penalties.

Residential builder licensing

Residential general contractors in Michigan must register through LARA under the Residential Builders Act. The license is required for residential construction projects of certain values. LARA verifies workers' comp coverage at license issuance and renewal.

Commercial general contractors do not require statewide licensing — registration is municipal and varies by city.

What Michigan GCs actually pay

2026 Michigan general contractor premiums typically range from $2,400 to $16,000 per $100,000 of qualifying payroll. Michigan's overall workers' comp cost environment is moderate — neither the highest-cost (CA, NY, IL) nor the lowest-cost (TN, ND) tier. The voluntary market is competitive among standard-market carriers.

The Hartford, Travelers, and direct-digital carriers like Next Insurance compete actively in Michigan. For accounts unable to obtain voluntary-market coverage, the Michigan Workers' Compensation Placement Facility is the residual market.

Bottom line for Michigan general contractors

Michigan's threshold rule (3 at-once OR 1 with 35+/wk) brings most ongoing GC operations into coverage. The WC-337 exclusion mechanism is available but with narrow eligibility — most GCs find that excluding officers requires structuring entities specifically for the 10%-ownership and 10-or-fewer-shareholders tests. The state's independent EMR calculation through the WCA means competitive shopping pays off, especially for accounts with strong loss-control documentation and clean recent claims history.

Top carriers writing workers' compensation insurance for General Contractors in Michigan

The Hartford
Growing small businesses that need a single-carrier program across five or more commercial lines — especially those needing D&O, EPLI, commercial umbrella, native workers' comp, or commercial auto in the same placement; contractors, trades, and field-services businesses needing GL + WC + commercial auto + umbrella on one carrier; buyers who value 215-year claims-relationship depth over lowest premium.
- Established Michigan construction underwriting; competitive on standard-market accounts statewide.
7.9/10
Good
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Travelers Small Business
Small businesses seeking the strongest combination of credit quality, coverage breadth, and at-market pricing on direct-bind paper — especially growing businesses that need D&O, EPLI, or commercial umbrella alongside primary liability; trades, contractors, and field-services businesses needing the full GL + WC + auto + umbrella package on A++ paper.
- Substantial Michigan construction book; competitive on Detroit metro and statewide GC accounts.
8.1/10
Good
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NEXT Insurance (ERGO NEXT)
Micro-businesses and freelancers under ~$1M revenue in service classes (cleaning, landscaping, personal training, photography, light contracting, consulting, professional services) that want online quote-to-bind in minutes on admitted paper with strong credit behind it.
- Direct-digital channel competitive on small payroll GC accounts; useful for sole-prop GCs adding their first employees.
7.8/10
Good
Read review