For many Michigan business owners, 2026 isn’t just about growth opportunities — it’s about identifying the blind spots that could quietly create major financial risk.
From underinsured buildings to shifting liability exposure and evolving labor regulations, experts say many businesses are operating with outdated assumptions about what their coverage and compliance truly protect.
“One of the biggest exposures we’re seeing is commercial property that hasn’t been revalued since construction costs surged,” said financial analyst and founder of Atlas CPA Index Brennan Kolar. “A 2025 industry analysis found that 88% of commercial properties are underinsured for building cover.”
That gap matters more than many owners realize. In the event of a fire, storm or other catastrophic loss, insurers typically pay based on the declared value listed on the policy — not the current rebuild cost. Since material and labor costs climbed dramatically after 2020, many businesses may discover too late that their coverage no longer reflects reality.
The issue often stems from policies that simply haven’t been revisited in years. A building insured for $500,000 several years ago may now cost significantly more to reconstruct, leaving owners responsible for the difference.
Insurance professionals say coverage misunderstandings extend beyond property policies.
“Don’t assume your business owners policy protects you from everything,” said insurance professional James Shaffer. “Take a close look at your current commercial coverage. Failing to obtain proper coverage to save money could ultimately be the business’s downfall.”
Many small and midsize businesses rely heavily on business owner’s policies because they bundle common protections into a more affordable package. However, owners may mistakenly believe those policies automatically cover every risk, from cyber incidents to professional liability claims or employment-related disputes.
At the same time, Michigan businesses are also watching potential legal and regulatory shifts that could expand exposure in entirely new ways.
Kolar pointed to the pending Michigan Supreme Court case Attorney General v. Eli Lilly and Co., which could remove a long- standing exemption shielding regulated businesses from class action lawsuits under the Michigan Consumer Protection Act.
“If that exemption falls, over 80 industries face new exposure to treble damages and duplicate enforcement,” he said.
Labor compliance is another growing concern. Michigan’s Earned Sick Time Act, which took effect in February 2025, carries steep penalties for violations.
“The penalty for noncompliance is eight times the employee’s normal hourly wage per violation,” Kolar said, noting that at Michigan’s current minimum wage of $13.73, that exceeds $100 per hour per violation.
For Michigan businesses navigating 2026, experts say the message is clear: Reviewing policies, valuations and compliance procedures now may prevent far more expensive surprises later.
Christine MacIntyre
Christine MacIntyre is a writer and photographer contributing to newspapers and magazines across Michigan and beyond, including national outlets. She brings a sharp eye for storytelling and a passion for community-driven content. She resides in Onondaga.
