Michigan Demolition Contractor Insurance

Standard policies leave dangerous gaps for demolition-specific exposures. These specialized coverages address risks that general contractors rarely face.

Pollution and Environmental Liability for Hazardous Materials

Pre-1980 structures in Michigan frequently contain asbestos, lead paint, and PCBs. Your CGL policy almost certainly excludes pollution-related claims, leaving you exposed to cleanup costs that routinely exceed $500,000 for even minor contamination events.

Contractor's pollution liability covers both sudden releases and gradual contamination discovered after project completion. Michigan's Department of Environment, Great Lakes, and Energy aggressively pursues responsible parties for environmental remediation, and being named in a cleanup order without pollution coverage can destroy your business. Look for policies that cover transportation of hazardous materials to disposal sites, as spills during transit create their own liability chain.

Professional Liability for Engineering and Planning

When you provide demolition plans, structural assessments, or safety engineering services, you're exposed to professional liability claims that CGL won't cover. If your demolition sequence causes unintended structural failure because of a planning error, you need errors and omissions coverage to respond.

This coverage becomes critical when you're the demolition contractor of record on projects requiring engineered demolition plans. Michigan municipalities increasingly require stamped engineering documents for any structure over three stories, making professional liability essential for larger commercial work.

Inland Marine Insurance for Specialized Tools and Machinery

Your diamond wire saws, concrete crushers, and hydraulic shears represent substantial capital investments that commercial property policies often exclude or undervalue. Inland marine coverage protects mobile equipment regardless of location, covering theft, vandalism, and accidental damage during transport.

Michigan's regulatory framework creates insurance requirements that contractors from other states often overlook. Understanding these rules prevents costly compliance failures.

Surety Bonds for Municipal and State Contracts

Michigan municipalities typically require performance and payment bonds for demolition contracts exceeding $50,000. These bonds guarantee project completion and payment to subcontractors and suppliers. Your bonding capacity directly limits the size of public projects you can pursue.

Surety companies evaluate your financial statements, credit history, and insurance portfolio before extending bonding lines. A contractor with inadequate insurance coverage will struggle to obtain bonds at competitive rates. Most sureties want to see CGL limits at least equal to the contract value and require evidence of pollution coverage for environmental demolition work.

Impact of LARA Licensing on Insurance Eligibility

The Michigan Department of Licensing and Regulatory Affairs requires residential builders licenses for demolition work on occupied residential structures. Commercial demolition doesn't require state licensing, but many municipalities impose their own permit requirements that include insurance verification.

Your LARA license status affects insurance eligibility because carriers verify licensing before binding coverage. Operating without required licenses can void your policy entirely, leaving you without coverage precisely when you need it. Some surplus lines carriers specialize in demolition risks and understand Michigan's licensing nuances better than standard market insurers.

Finding adequate coverage for Michigan demolition operations requires working with specialists who understand the industry's unique risk profile.

Working with Michigan-Based Surplus Lines Brokers

Standard insurance markets routinely decline demolition risks or offer policies with crippling exclusions. Surplus lines brokers access non-admitted carriers willing to write coverage that admitted markets won't touch. These brokers understand which carriers have appetite for specific demolition types and can negotiate coverage terms that address your actual exposures.

A broker experienced with Michigan demolition contractors knows which carriers will remove vibration exclusions, which offer competitive pollution coverage, and which provide realistic equipment valuations. This expertise proves particularly valuable when you need to bind coverage quickly for a time-sensitive project bid.

Reviewing Contractual Indemnity and Waiver Requirements

Project owners and general contractors increasingly shift risk to demolition subcontractors through aggressive indemnification clauses. Before signing any contract, compare the indemnity requirements against your actual coverage. Many policies exclude contractually assumed liability, meaning you've agreed to exposures your insurance won't cover.

Pay particular attention to additional insured requirements, waiver of subrogation clauses, and primary and non-contributory endorsements. These contract provisions can significantly expand your liability beyond what your standard policy addresses. Your broker should review major contracts before you sign them to identify coverage gaps.