HVAC contractor insurance in Michigan

What Michigan's mechanical license asks of your insurance

Nothing, directly. Michigan's mechanical contractor license carries no liability minimum, no bond and no workers' comp proof. We reviewed the licensing article of the Skilled Trades Regulation Act section by section and found no insurance condition, so the numbers you carry come from contracts, not from the license.

Who licenses HVAC work in Michigan

The Department of Licensing and Regulatory Affairs (LARA), through the Bureau of Construction Codes and its Mechanical Section, licenses mechanical contractors under the Skilled Trades Regulation Act, in force since April 2017. A license is limited to the work classifications you test for. Of the ten classifications, these are the ones HVAC shops pick from:

• HVAC equipment and ductwork, for installs and change-outs.
• Hydronic heating and cooling and process piping, for hot-water systems.
• Refrigeration, for supermarket cases and other refrigeration that isn't comfort cooling.
• Limited heating service, covering most gas-fired equipment under 400,000 BTU input per unit (certain gas sectional boilers up to 1 million BTU), oil equipment under 5 gallons per hour, and electric furnaces and boilers. Unlimited heating service drops the size and fuel limits.
• Limited refrigeration and air conditioning service, covering Group 1 refrigerant systems. The unlimited version has no capacity or refrigerant-type limit.

Ask LARA which class fits your actual call mix before you test, since a license limited to the wrong service class can keep you off larger commercial calls.

Contractor of record, not a journeyman card

Michigan licenses the individual mechanical contractor, and there's no state mechanical journeyman license in this article. A company works under a licensed person it designates as contractor of record, an employee or officer, and notifies LARA. If that person leaves, the business gets 90 days to designate a new one. To sit for a classification, you typically need three years or 6,000 hours of experience in it; licenses cost $100 a year and run on a three-year cycle ending August 31.

There's no job-value threshold. Installing, altering or servicing equipment in a regulated classification takes the license and the permit. The narrow exceptions: an owner-occupant may install a heating or refrigerating system in their own single-family home with a permit and inspection, and licensed alarm contractors may handle thermostats.

What cities can and can't do

State law bars a municipality from setting up or keeping its own licensing for mechanical work. Detroit, Grand Rapids or Kalamazoo can issue permits, inspect your work and register your state license, and the registration fee is capped at $15, good until the license expires. They can't set up a city mechanical license of their own.

Every tech who connects gauges to a sealed system still needs federal EPA Section 608 certification. What Section 608 means for your shop

Check classifications and renewal dates with LARA's Mechanical Section before you add a service line.

Michigan workers' comp and the 13-week helper rule

Michigan's comp trigger has a twist that catches small HVAC shops. The headline rule kicks in when three or more people work for you simultaneously. The twist: a shop with only one or two workers is covered too once any one of them has put in at least 35 hours a week for 13 weeks or more within the last 52.

In practice, an owner who keeps one full-time helper or apprentice through a heating season has crossed the line by spring.

• Exclusions by election: an endorsement can leave off named partners, plus the owner's spouse, children or parents. An LLC manager-member holding 10% or more of an LLC with ten members or fewer, or a corporate officer-stockholder holding 10% or more of a corporation with ten stockholders or fewer, may opt out individually in writing to the carrier.
• Upstream liability: when a contractor hires a sub that hasn't bought comp, the hiring contractor owes comp to that sub's workers as though it employed them. That's why GCs collect comp certificates from mechanical subs, and why you should collect them from yours.
• Penalties: going without required coverage is a misdemeanor carrying up to a $1,000 fine, up to six months in jail or both, counted daily, and an injured worker may sue the uninsured employer in civil court.

The mechanical license never asks for comp proof, so the first check usually comes from a GC. The Workers' Disability Compensation Agency administers the law. How we build comp for an HVAC payroll: workers' comp for HVAC shops.

Michigan risks behind an HVAC premium

Michigan's risk picture is cold weather, a no-fault auto system and a license that leans on one person.

Polar-vortex weeks

On January 30 and 31, 2019, temperatures fell below minus 25°F. A fire on January 30 at the Ray Compressor Station, Consumers Energy's largest natural gas storage facility, disrupted gas supply, and the state asked all residents to conserve natural gas, including through a State Police text alert. Cold snaps like that pack a winter's worth of no-heat calls, rushed furnace repairs and frozen-coil damage into a few days. A heat exchanger misread at 2 a.m. is still your completed work in April.

No-fault PIP on every van

Every vehicle that must be registered in Michigan carries personal protection insurance (PIP), property protection insurance and residual liability. Policies issued or renewed after July 1, 2020 pick a PIP medical level: $250,000, $500,000, unlimited, or $50,000 for qualifying Medicaid enrollees. The level you choose for a van fleet is a direct driver of the auto premium.

When the contractor of record walks out

The license lives with a person, not the company. If your contractor of record quits or retires, you have 90 days to designate a replacement who holds the right classifications. That's a staffing problem first, but a lapse can also stall permits and the jobs your policies are rated on.

Example scenario: A 12-tech residential shop loses its only licensee to a competitor in October. The owner's own license covers only limited heating service, so the shop's larger commercial heating jobs stop until a new hire qualifies. The shop's commercial bids sit unsigned for two months.

Michigan HVAC markets we serve

How Michigan HVAC insurance is priced

With no license floor, your limits and your price follow the work you chase. A residential service shop with landlord accounts and a commercial contractor bidding GC work can hold the same classifications and pay very different premiums.

Michigan factors we ask about:

• Your PIP choices. The no-fault medical level on each van is a direct auto cost.
• Your classifications. Refrigeration and unlimited service work rate differently from residential heating service.
• Contract limits. GC and property-manager minimums drive general liability and umbrella limits.
• Payroll and the helper rule. Full-time helpers kept past 13 weeks bring comp into the quote.
• Advice work. Benchmarking and electrification consulting can add professional liability.

What you pay depends on your payroll by class code, your annual revenue, your mix of installation and service work, residential versus commercial jobs, the vans you run, your claims history and the limits you pick. For published ranges, see the HVAC insurance cost guide.

Our Michigan agency license

HVAC Insurance Group is a brand of The Allen Thomas Group, licensed in Michigan (License #0106519, NPN 7642818). Heating, cooling and refrigeration contractors on both peninsulas can request a quote, and every Michigan request is reviewed by a licensed agent before we take it to carriers.