3.2 Michigan General Liability Insurance

Modified Comparative Negligence (the 50% Bar)

Michigan apportions fault among all parties and then reduces or bars recovery accordingly. Two related rules govern, both codified at MCL 600.2959:

• A plaintiff's economic damages (medical bills, wage loss, repair costs) are reduced by the plaintiff's percentage of fault, with no fault ceiling.
• A plaintiff's non-economic damages (pain and suffering, emotional distress) are completely barred if the plaintiff is more than 50% at fault.

Put simply, Michigan is a 50% bar state for the pain-and-suffering portion of a claim. This is stricter than the many states using a 51% bar, where a plaintiff exactly at 50% can still recover.

Fault Allocation Examples

Exam trap: The bar attaches at more than 50% for non-economic damages. At exactly 50% the plaintiff still collects half of both buckets. Economic damages are never fully barred by comparative fault — only proportionally reduced.

Several vs. Joint and Several Liability

Michigan's 1995 tort reform (MCL 600.6304 and 600.6312) abolished joint and several liability in most multi-defendant cases. Each defendant pays only its proportionate share of fault — this is several (allocated) liability. The court enters a separate judgment against each defendant based on assigned percentages.

A producer's takeaway: an insured defendant in Michigan generally cannot be forced to pay an empty-pocket co-defendant's share, which affects exposure and limit selection.

Worked example: Three contractors are sued for a $1,000,000 loss and assigned fault of 70%, 20%, and 10%. Under several liability, the insured 20%-fault contractor pays only $200,000, even if the 70%-fault contractor is bankrupt. In a true joint-and-several state, that same insured could be tagged for the full $1,000,000 and then chase the others for contribution.

Commercial General Liability (CGL)

A standard CGL policy provides Coverage A (bodily injury and property damage), Coverage B (personal and advertising injury), and Coverage C (medical payments). The single most testable concept is the coverage trigger:

CGL policies impose a duty to defend that is broader than the duty to indemnify — the insurer must defend any suit that potentially falls within coverage, even groundless ones, and defense costs are typically paid outside the limits in a standard ISO CGL. The pollution exclusion removes coverage for gradual contamination; insureds buy separate Environmental Impairment Liability (EIL) or pollution legal liability to fill the gap.

Michigan environmental cleanup duties arise under NREPA (Natural Resources and Environmental Protection Act), enforced by the Department of Environment, Great Lakes, and Energy (EGLE), which can impose strict cleanup liability.

Professional Liability and Medical Malpractice

Professional liability (errors and omissions, E&O) is almost always written on a claims-made basis. Michigan medical malpractice has unique procedural gates:

• A Notice of Intent (NOI) must be served at least 182 days before filing suit (MCL 600.2912b).
• An Affidavit of Merit signed by a qualifying expert must accompany the complaint (MCL 600.2912d).
• Non-economic damage caps apply and are adjusted annually for inflation by the state treasurer; a higher cap applies in cases of severe permanent injury (e.g., paralysis, loss of cognitive function).

Products Liability

Michigan recognizes negligence, breach of warranty, and strict-liability theories for defective products. Important limits:

• Statute of limitations: 3 years from the date of injury (MCL 600.5805).
• The economic loss doctrine routes purely economic claims (product damages only) to contract/UCC remedies, not tort.
• The products-completed operations hazard in a CGL covers injuries occurring after work is finished and off premises — a frequently tested distinction from the premises/ongoing-operations hazard.

Exam tip: Match the theory to the remedy — defective product causing bodily injury = tort/products liability; product that merely fails to perform with no other damage = economic loss, contract remedy.

Liquor Liability and Other Michigan Statutory Exposures

Michigan's Dramshop Act (MCL 436.1801) creates liability for a licensed seller who unlawfully furnishes alcohol to a visibly intoxicated person or a minor who then injures a third party. Standard CGL policies exclude liquor liability for businesses in the business of selling alcohol, so bars, restaurants, and caterers must buy a separate liquor liability policy. The statute requires the injured plaintiff to identify and "name and retain" the allegedly intoxicated person, a procedural trap that defense counsel and insurers watch closely.

A producer placing commercial liability in Michigan should map each insured's operations to the right form: premises and operations to CGL, finished work to products-completed operations, professional advice to E&O, environmental exposure to pollution liability, and alcohol sales to dramshop coverage. Gaps between these forms are where uncovered claims hide.