3.2 Michigan General Liability Insurance
Key Takeaways
- Michigan uses modified comparative negligence with a 50% bar for fault allocation
- Commercial general liability policies use file and use rate regulation
- Michigan has specific pollution liability requirements and disclosures
- Professional liability is required for certain licensed professions
- Joint and several liability applies in limited circumstances
Michigan has specific requirements for general liability insurance that agents must understand.
Modified Comparative Negligence
Michigan uses modified comparative negligence with a 50% bar:
How It Works
- Fault is allocated among all parties
- Damages reduced by percentage of fault
- 50% Bar: If 50% or more at fault, NO recovery
- Different from states with 51% bar
Example
| Driver A Fault | Driver B Fault | Driver A Recovery |
|---|---|---|
| 40% | 60% | 60% of damages |
| 49% | 51% | 51% of damages |
| 50% | 50% | NOTHING |
| 60% | 40% | NOTHING |
Exam Tip: Michigan's 50% bar means you recover nothing if you are 50% OR MORE at fault. Some states use 51%.
Joint and Several Liability
Michigan has modified joint and several liability:
Current Rules
| Defendant Fault | Liability Rule |
|---|---|
| Economic damages | Joint and several |
| Non-economic damages | Several only (proportionate) |
What This Means
- Economic damages (medical bills, lost wages): Full recovery from any defendant
- Non-economic damages (pain and suffering): Only proportionate share
Commercial General Liability (CGL)
Michigan CGL policies must comply with state requirements:
Required Elements
- Occurrence vs. claims-made coverage clearly disclosed
- Coverage territory defined
- Limits per occurrence and aggregate
- Defense costs—duty to defend
- Pollution exclusion with disclosure
Professional Liability
Michigan requires or regulates professional liability for various professions:
State-Mandated Coverage
| Profession | Requirement |
|---|---|
| Attorneys | Disclosure if no coverage |
| Architects | E&O typically required |
| Engineers | E&O typically required |
| Healthcare Providers | Medical malpractice required |
| Insurance Agents | Recommended but not mandatory |
Medical Malpractice
Michigan has specific medical malpractice provisions:
- Certificate of merit required for lawsuits
- Caps on non-economic damages
- Affidavit of merit required
- Pre-suit notice requirements
Pollution Liability
Michigan has environmental liability requirements:
Disclosure Requirements
- Pollution exclusion must be explained
- Environmental impairment liability options
- Underground storage tank requirements
- LUST (Leaking Underground Storage Tank) coverage
Michigan Environmental Laws
- Michigan NREPA (Natural Resources and Environmental Protection Act)
- Department of Environment, Great Lakes, and Energy (EGLE) oversight
- Cleanup liability requirements
- Strict liability for certain activities
Products Liability
Michigan products liability insurance:
Coverage
- Bodily injury from defective products
- Property damage from defective products
- Products-completed operations hazard
- Aggregate limits apply
Michigan Law
- Negligence and strict liability theories
- Economic loss doctrine limits recovery
- Statute of limitations: 3 years
- Statute of repose applies
Under Michigan's modified comparative negligence rule, what happens if a plaintiff is 50% at fault?
How does Michigan apply joint and several liability for non-economic damages?