If you are a true sole proprietor in Michigan with no employees, you are not required to carry workers' comp, because you are never considered your own employee and you do not count toward the state's coverage test. The moment you hire and meet Michigan's test (3 or more people working at one time, or one person at 35 or more hours a week for 13 weeks or longer), a policy becomes mandatory for your staff (MCL 418.115). So going solo keeps you outside the requirement, and hiring is what pulls you in.
Who this is for: Michigan sole proprietors, from a solo trade to one who is about to bring on help.
The short version
- A sole proprietor working in their own business is never an employee and is not required to cover themselves.
- The agency will return an exclusion form filed by a sole proprietor with no employees, because there is nothing to exclude.
- A workers' comp policy cannot pay your own injuries, because a sole proprietor is self-employed and not an employee; for that you need health, accident, or disability insurance.
- Hiring and meeting the 3-at-one-time or 35-hours-for-13-weeks test makes coverage mandatory for your staff.
- Many general contractors and clients still require proof of coverage before you can work, even solo.
Why a solo owner is not required to carry
Michigan law treats a sole proprietor as the business, not as an employee of it, so you are not counted toward the coverage test and are not required to insure yourself. That is why the agency actually returns any exclusion form a no-employee sole proprietor tries to file: there is nothing to exclude. The requirement only appears when other people work for you and you meet one of the two triggers. Until then, whether to carry a policy on yourself is a business decision, not a legal one.
| Your setup | Is comp required? | What to know |
|---|---|---|
| Solo, no employees | No | You are not your own employee and are not counted; a comp policy cannot pay your own injuries, so look to health or disability cover |
| Hired help, meeting the test | Yes | Your employees must be covered from day one once you cross a trigger |
| Solo, working under a general contractor | Not by the state | The state does not force it, but the GC or client usually requires proof of coverage |
When you might want a policy anyway
Even with no legal duty, one thing still pushes solo owners to buy: general contractors, property managers, and some clients will not let you on the job without proof of workers' comp, and if you have none they may charge the cost of covering you back to you. A policy written for an owner with no employees, sometimes called a ghost policy, exists mainly to satisfy that paperwork. Be clear about what it does not do, though. Because a Michigan sole proprietor is self-employed and not an employee, the policy will not pay your own on-the-job injuries even though it proves coverage to a client. If you want your own injuries covered, that protection comes from health, accident, or disability insurance, not from a workers' comp policy.
A Lansing example
Illustrative, not a quote. A solo cleaning contractor in Lansing has no employees, so Michigan does not require a policy. A property management company she wants to clean for will not add her to its buildings without proof of workers' comp. We set her up with a policy that satisfies the contract, and we make clear it proves coverage to the client but would not pay her own injuries, since as a sole proprietor she is not an employee; because she works alone with no health backup, we point her to health and disability insurance so a slip on a wet floor would actually be covered. See our workers comp for cleaning and janitorial page.
Real questions Michigan owners ask
Do I need workers comp as a sole proprietor in Michigan with no employees?
No. A sole proprietor with no employees is never their own employee and is not required to carry workers comp. A comp policy would not even pay your own injuries, since you are not an employee, so for that you would look to health or disability insurance instead.
Can I cover myself as a Michigan sole proprietor?
No. A Michigan sole proprietor is self-employed, not an employee, so a workers' comp policy will not pay your own injuries even if you buy one to prove coverage to a client. For protection against your own on-the-job injuries, look to health, accident, or disability insurance instead.
Why did the agency return my exclusion form?
Because there was nothing to exclude. A sole proprietor with no employees is not counted as an employee in the first place, so the agency returns exclusion forms filed by solo owners with no staff.
When do I have to get coverage as a sole proprietor?
Once you hire and meet the test. When you have 3 people working at one time, or one worker at 35 or more hours a week for 13 weeks, coverage becomes mandatory for your employees.
A client wants proof of workers comp but I work alone. What do I do?
You can buy a policy anyway. Many solo owners get a policy built for an owner with no employees just to satisfy a contract, since general contractors and property managers often will not let you work without it.
Will a general contractor charge me if I have no coverage?
Often yes. If you cannot show your own workers comp, a general contractor may add the cost of covering you to what it charges, so carrying your own policy can actually save money on a job.
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 own an LLC: 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?
- Hiring your first employee: what changes
- Michigan cleaning and janitorial 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.