What is the minimum workers' compensation coverage limit required for Michigan contractors?
Correct Answer
D) No minimum - coverage as required by law
Michigan requires workers' compensation coverage as mandated by law but does not specify minimum dollar amounts - coverage is based on payroll and classification.
Why This Is the Correct Answer
Michigan's Workers' Disability Compensation Act does not set a minimum dollar coverage limit the way general liability insurance does. Instead, it mandates that employers carry workers' compensation coverage sufficient to pay all statutory benefits as required by law. Coverage is structured by payroll classification and risk — not a fixed per-occurrence dollar floor. Therefore the correct answer is 'No minimum — coverage as required by law.'
Why the Other Options Are Wrong
Option A: $500,000 per occurrence
$500,000 per occurrence is a general liability coverage figure sometimes seen in contractor insurance discussions, but it is not a Michigan workers' compensation statutory minimum.
Option B: $1,000,000 per occurrence
$1,000,000 per occurrence is a common general liability policy limit, not a workers' compensation requirement. Candidates who confuse general liability with workers' comp often select this option.
Option C: $100,000 per occurrence
$100,000 per occurrence is another general liability figure, not a workers' compensation standard. Workers' comp pays statutory benefits (medical + wage replacement) regardless of a per-occurrence cap.
Memory Technique
Workers' comp = statutory, not a dollar cap. Think: 'The law sets the benefits, not the dollar ceiling.' Unlike a liability policy where you choose a limit, workers' comp coverage must simply comply with whatever the Workers' Disability Compensation Act requires for each injured worker.
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What is the minimum general liability insurance coverage amount required for Michigan residential builders?
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