If your Michigan LLC meets the state's coverage test, yes, it must carry workers' comp; the test is 3 or more people working at one time, or one person working 35 or more hours a week for 13 weeks or longer in the past year (MCL 418.115). A member who is a manager of the LLC is treated as an employee and counts toward that test by default, unless that member formally opts out. So the question is how many people work for the LLC, and whether the owners want to be on the policy.
Who this is for: owners of a Michigan LLC, whether a single-member LLC with no staff, a multi-member LLC, or an LLC running a payroll of W-2 employees.
The short version
- An LLC that meets the 3-at-one-time or 35-hours-for-13-weeks test must carry coverage.
- A member who is a manager of the LLC is treated as an employee and counts toward the test by default.
- A manager-member who owns at least 10 percent of an LLC with 10 or fewer members may opt out, with written notice to the carrier and the consent of the LLC approved by a majority vote of its members (MCL 418.161(3)).
- Opting a member out is filed on the state's exclusion form (Form WC-337) and is not valid until the agency stamps it on file.
- Non-owner employees are always covered; opting out only affects the owner who files it.
How Michigan treats LLC manager-members
Michigan does not automatically leave LLC owners off the policy. A member who acts as a manager of the LLC is treated as an employee, which means that member counts toward the coverage test and is covered by default. The law gives one path out: a manager-member who owns at least 10 percent of an LLC that has 10 or fewer members may elect to be excluded, by giving written notice of the election to the carrier with the consent of the LLC approved by a majority vote of its members, and the exclusion stays in place until the member revokes it in writing. That election is documented on Form WC-337 and is not valid until the agency stamps it showing it is on file. Non-manager arrangements and larger LLCs do not get this shortcut.
What applies to your LLC
| Your LLC setup | Is comp required? | What owners and staff should know |
|---|---|---|
| Single-member, no employees | Usually no | You are not counted alone; you may elect coverage on yourself if you want your injuries paid |
| A few manager-members, no other staff | Only if you meet the test | Manager-members count; those with 10%+ in a 10-or-fewer-member LLC may opt out on Form WC-337 |
| Any LLC that meets the 3-person or 35-hours test | Yes | Employees covered from day one; eligible members may still opt out on Form WC-337 |
| LLC using uninsured subcontractors | Exposed either way | You can be liable for an uninsured sub's injured workers (MCL 418.171) |
Electing out, the right way
Because a manager-member is on the policy by default, an owner who wants off has to do it properly. You give the carrier written notice of the election, get the consent of the LLC by a majority vote of its members, and file Form WC-337, which is not valid until the agency stamps it on file. Skip the filing and you are still legally covered and still counted. Many owner-run LLCs that hire staff keep only the employees on the policy, which trims the premium while still protecting the business from an employee-injury lawsuit. And if your LLC hires subcontractors, remember you can be responsible for an uninsured sub's injured workers under MCL 418.171, so collect proof of coverage from every sub.
A Grand Rapids example
Illustrative, not a quote. A two-member electrical contracting LLC in Grand Rapids runs the business with one W-2 apprentice, and both members and the apprentice are usually working at one time. That is 3 people on the job, so Michigan requires a policy. Both members do hands-on wiring, but each owns half of a two-member LLC, so each qualifies to opt out on Form WC-337 if they carry their own coverage; the apprentice must stay covered no matter what. When a builder requires proof of coverage, the LLC produces a certificate the same day. See our workers comp for electricians page.
Real questions Michigan owners ask
Does my single-member Michigan LLC need workers comp?
Usually not by itself. One member with no other workers does not meet the coverage test, so a policy is not required, though you may elect coverage on yourself if you want your own injuries paid.
Are LLC members automatically covered in Michigan?
Manager-members are, by default. A member who manages the LLC is treated as an employee and is covered unless they file a valid exclusion, so they are on the policy until they opt out.
How does an LLC member opt out of coverage?
By election and filing. A manager-member who owns at least 10 percent of an LLC with 10 or fewer members gives written notice to the carrier, gets the consent of the LLC by a majority vote of its members, and files Form WC-337, which is valid only once the agency stamps it.
If I opt out, are my employees still covered?
Yes. Opting a member out only affects that member. Every non-owner employee stays fully covered, and they cannot be excluded.
Does adding a member change whether I need coverage?
It can. Manager-members count toward the 3-people-at-one-time test, so adding working members plus any staff can push you across the trigger and make a policy required.
Can I be liable for a subcontractor my LLC hires?
Yes. If you use a subcontractor who has no coverage, you can be responsible for that sub's injured workers under Michigan law, so collect proof of coverage from every sub before they start.
Why Michigan owners choose Morrow
- We shop the right market for you. In Michigan you buy workers' comp on the open market from any private carrier licensed in the state, because Michigan has no state fund; if no carrier will take you, the Michigan Workers' Compensation Placement Facility (the assigned-risk plan) is the guaranteed fallback, so we can shop your rate freely and still keep a backstop for hard-to-place work.
- We catch pricing mistakes. Your price depends heavily on the category your work falls into for pricing (the class code). Put people in the wrong category and you overpay for years. We review your payroll and classifications before you buy.
- Proof of coverage, fast. Need a certificate (proof of coverage) for a general contractor or a landlord before Monday? We turn those around the same business day for most carriers.
- We help lower the score that drives your price. Insurers give you a score based on your past claims that raises or lowers your cost (the experience modification rate). We review it each year, flag errors, and connect you with return-to-work and safety resources that bring it down.
- Real people when a claim happens. When someone gets hurt, we stay involved through the life of the claim, not just at renewal.
Related Michigan guides
Every Michigan business is set up a little differently. These companion guides answer the same question for other situations, plus the national explainers behind the terms used here.
- Business insurance in Michigan (start here)
- Workers comp: the owner's overview
- I'm a sole proprietor: do I need workers comp?
- I own a corporation (C-corp or S-corp): do I need it?
- We're a partnership: do we need workers comp?
- We're a nonprofit: do we need workers comp?
- My workers are 1099: do I still need it?
- Only part-time or seasonal staff: do I need it?
- I only employ family: do I need workers comp?
- Remote or out-of-state staff: do I need coverage?
- What happens if I don't carry workers comp?
- How much does workers comp cost?
- How do I get workers comp (even if turned down)?
- What insurance do I need for a contractor license?
- Workers compensation insurance, explained
- What workers comp costs (national guide)
- Do sole proprietors need workers comp?
- What workers comp does not cover
- Michigan electrician workers comp
This guide is general information, not legal advice. Michigan rules and penalty amounts can change, so verify current requirements with the Michigan Workers' Disability Compensation Agency (WDCA) or a licensed advisor before you rely on them. Last updated: July 2026.