Plumbing contractor insurance in Michigan

Michigan's one-license system for plumbing contractors

Plumbing licenses in Michigan come from the state. The Department of Licensing and Regulatory Affairs (LARA) handles them through its Bureau of Construction Codes, working with the State Plumbing Board.

Forms and renewals live on the LARA Bureau of Construction Codes site.

The licenses follow a ladder:

• Apprentice plumber (a registration, not a license)
• Journey plumber license
• Master plumber
• Plumbing contractor. The applicant must hold a master plumber license or employ a master plumber as the firm's representative. Only a sole proprietor, partner, corporate officer or LLC member can apply.

The rules live in Article 11 of the Skilled Trades Regulation Act. Licensed master, journey and apprentice plumbers must carry their license and a photo ID on the job.

Cities can't add their own license. MCL 339.6125 says a local unit "may not engage in or require local licensing." It may ask a state-licensed contractor to register, for a fee of no more than $15, good until the state license expires. Permits go only to licensed plumbing contractors, using the contractor's license number and a designated master plumber's number.

So a Lansing permit desk can register your license, but it can't make you sit a second exam.

We found no liability insurance requirement in Article 11 for getting or renewing a plumbing contractor license, and no state license bond.

That makes Michigan an easy state to expand in. A second crew in a new county needs the same license you already hold, a $15 registration at most, and insurance that a new set of GCs will accept.

When Michigan requires workers' comp: the full-time helper test

Michigan uses a two-part test. Under MCL 418.115, you must carry comp if you regularly employ three or more people at one time. You also need it with fewer than three if even one employee has worked 35 or more hours a week for 13 weeks or longer in the past 52 weeks.

The state's Workers' Disability Compensation Agency oversees the system.

Here's how fast that happens. Hire one full-time helper in March, keep them at 40 hours, and they pass 13 weeks in early June. Bind the policy before the first paycheck, because the clock doesn't wait for your renewal date.

Upstream contractors have a stake in your comp. Under MCL 418.171, a principal that hires a contractor who hasn't complied is liable for comp to that contractor's workers as if it employed them. The principal can seek indemnity from the contractor and can require a written reimbursement agreement. The same rule reaches subcontractors.

Owners have some room to step out under MCL 418.161:

• Named partners, and the employer's spouse, child or parent, can be excluded by endorsement.
• An LLC manager-member who owns at least 10% of an LLC with no more than 10 members can elect out by written notice to the carrier.
• A corporate officer-stockholder who owns at least 10% of a corporation with no more than 10 stockholders can do the same.

Going without required coverage is a misdemeanor under MCL 418.641, with fines up to $1,000, up to six months in jail, or both, and every day counts as a new offense. An injured employee can also sue the uninsured employer in civil court.

A comp policy has a second half worth knowing about. Part Two, employer's liability, typically defends you when a tech's injury turns into a lawsuit outside the comp system, like a suit from a property owner your tech sued who then turns around and sues you.

Our guide to workers' comp for plumbers explains payroll, classes and audits. Get a quote for your plumbing business →

Risks behind Michigan plumbing premiums

A 20-year push to replace lead and GPCL lines

Since January 2021, Michigan's drinking water rules have required community water supplies to replace every lead service line and every "galvanized previously connected to lead" (GPCL) line within 20 years, at the water supply's expense. EGLE reports 98,253 of those lines replaced statewide from 2021 through 2025, including 24,521 in 2024 alone.

Crews on that work cut lead pipe and dig near the street. The base liability form excludes pollution, and endorsements on many contractor policies widen that exclusion. Whether a lead claim is covered then turns on your exact wording, which is why many replacement crews add a contractors pollution liability policy.

Some of the oldest housing in the country

About 35.6% of Michigan's homes were built before 1960, against 24.8% nationally. In Detroit the share is 77.8%, and the median home dates to 1947.

Cast-iron stacks, old clay drains and galvanized supply piping crack when you touch them. When a joint you made lets go weeks later, that's a completed operations claim: damage that appears after you've finished the job. Most general liability policies include it, within their limits and exclusions.

Summer storms and basement backups

FEMA declared a major disaster, DR-4607, for the severe storms, flooding and tornadoes of June 25-26, 2021. It approved more than $196 million in individual assistance across 56,531 applications.

Storms like that fill basements, then fill your schedule with cleanup and re-plumbing. They also bring arguments over whether a backup came from the storm or from work you did before it. Keep dated photos of every cleanout and check valve you install.

Example scenario: A suburban homeowner finds a foot of water in a finished basement after a July downpour. Three weeks earlier, a two-van shop replaced the floor drain, and the owner turned down the backwater valve the shop quoted. The homeowner's carrier pays the claim, then sends the shop a letter asking it to pay the carrier back. A signed note showing the owner declined the valve is the shop's best friend here, and whether its policy defends turns on the facts and the wording.

Michigan cities we write plumbing insurance in

What sets the price of plumber insurance in Michigan

There's no honest Michigan price we can post for every shop. Your price depends on payroll, revenue, claims history, the work you do and the limits you choose. Michigan adds a few factors of its own.

Michigan runs its own comp data agency. Pure premiums come from the Compensation Advisory Organization of Michigan (CAOM), the state's data collection agency. CAOM also runs the Michigan Workers' Compensation Placement Facility, the assigned risk market for employers who can't find coverage in the regular market.

Owner elections change the payroll. A qualifying LLC manager-member or officer-stockholder who elects out takes their wages off the comp calculation. Leave them on, and their payroll counts.

Old housing raises liability questions. Underwriters often ask what share of your work is in pre-war homes. A Detroit or Grand Rapids repipe shop answers that differently than a new-build shop in the suburbs.

Lead line work can add a policy. If service-line replacement is a big share of revenue, expect questions about pollution coverage and how you handle disturbed lead pipe.

Statewide reach means more driving. Because one license works everywhere, Michigan shops tend to grow into new cities, and each added van shows up on the auto bill.

See our plumber insurance cost guide for national figures by coverage. Get a quote for your plumbing business →

Our Michigan license

Plumbing Insurance Group is a brand of The Allen Thomas Group, licensed in Michigan (License #0106519, NPN 7642818). We quote licensed plumbing contractors anywhere in the state, from Metro Detroit to the Upper Peninsula. All 28 states are listed on our licenses page.