Construction Claim Rules in Michigan

Statutory interest rate

3.959% / year (as of July 1, 2026, resets twice yearly)

1% plus the average 5-year U.S. Treasury note yield, recalculated every Jan 1 and Jul 1 under MCL 600.6013(8). A written contract or instrument specifying its own rate, filed on or after July 1, 2002, may instead cap the rate at the lesser of 13% (compounded annually) or the contract rate under MCL 600.6013(7); check which applies.

Compounding: Compounded annually

Citation: MCL 600.6013(8); written-instrument cap at MCL 600.6013(7)

Source: https://www.michigan.gov/taxes/interest-rates-for-money-judgments

Last checked: 2026-08-23

3.959% for the period beginning July 1, 2026 was reconfirmed directly from the Michigan Department of Treasury's interest-rates-for-money-judgments page, which still applies since the next reset is Jan 1, 2027. Subsection citations (8) for the treasury-note formula and (7) for the 13% written-instrument cap were corroborated by two independent secondary legal-reference sources (FindLaw and Onecle); the primary legislature.mi.gov page itself could not be fetched due to a certificate/robots error this pass, so the subsection numbers should be spot-checked there directly when convenient.

Accrual: breach of contract claim

Notable outlier: not date of breach, from the date the lawsuit (complaint) was filed

MCL 600.6013 calculates interest on a money judgment, including one on a written instrument such as a construction contract, from the date the complaint was filed through satisfaction of the judgment. It does not run from the date of breach.

Citation: MCL 600.6013(7) (complaints filed after July 1, 2002)

Source: https://www.legislature.mi.gov/Laws/MCL?objectName=mcl-600-6013

The statute has several subsections tied to different filing-date windows (rates and mechanics changed over the years); confirm which subsection applies based on when your complaint was or will be filed.

Accrual: property damage / tort claim

Same rule as contract claims: not date of loss, from the date the lawsuit was filed

For actions not based on a written instrument, including property-damage tort claims, MCL 600.6013(8) also calculates interest from the date the complaint was filed, not the date of loss.

Citation: MCL 600.6013(8) (complaints filed after January 1, 1987)

Source: https://www.legislature.mi.gov/Laws/MCL?objectName=mcl-600-6013

Like Texas, Michigan ties its interest start date to when suit is filed rather than to when the loss or breach occurred, so filing promptly directly affects how much interest accrues.

Actual Cash Value rule

Replacement cost less depreciation (NOT the broad evidence rule) -- the Michigan Supreme Court superseded the older broad-evidence approach in 1992.

Corrected: the prior entry described Michigan as a broad-evidence-rule state, citing Davis v. National American Ins. Co., 78 Mich. App. 225 (1977). That was Michigan's rule until 1992, when the Michigan Supreme Court in Smith v. Michigan Basic Property Ins. Ass'n, 441 Mich. 181, 490 N.W.2d 864 (1992), squarely held: 'Actual cash value means replacement cost less depreciation.' A 2010 legal commentary confirms directly that no Michigan appellate court has followed Davis's broad-evidence approach since Smith was decided. Salesin v. State Farm Fire & Cas. Co., 229 Mich. App. 346 (1998) -- already cited in the prior entry, but for the wrong rule -- actually applied and confirmed the Smith replacement-cost-less-depreciation standard, not broad evidence. The prior entry cited Salesin as support for broad evidence when Salesin actually supports the opposite rule.

Citation: Smith v. Michigan Basic Property Ins. Ass'n, 441 Mich. 181, 490 N.W.2d 864 (Mich. 1992); Salesin v. State Farm Fire & Cas. Co., 229 Mich. App. 346 (1998).

Source: https://law.justia.com/cases/michigan/supreme-court/1992/90632-5.html

CORRECTED (real error, not just a missing link): the prior entry described the wrong rule entirely -- the broad evidence rule from a 1977 case that was superseded by the Michigan Supreme Court in 1992. This surfaced while doing routine source-link work, a reminder that filling in missing links is also a real opportunity to catch stale substantive content along the way.

ACV statute or regulation

Michigan regulates depreciation of labor and other nontangible items through a Department of Insurance and Financial Services (DIFS) bulletin issued under its unfair-policy-provision authority, not a standalone statute.

DIFS Bulletin 2024-26-INS (superseding an earlier Bulletin 2024-18-INS) states that personal lines homeowners and dwelling insurers may not depreciate nontangible items, defined as labor, taxes, fees and overhead and profit, in standard ACV coverage. An insurer that wants to depreciate those items must offer it only as an optional, separately priced standalone endorsement that identifies the nontangible items subject to depreciation, with the base policy premium reduced to reflect the narrower coverage; any other nonphysical item an insurer wants to depreciate requires prior DIFS approval. The bulletin cites MCL 500.2236(5), which bars policy language that is inconsistent, ambiguous or misleading or that unreasonably or deceptively affects the risk, as its legal basis. It applies to personal lines homeowners or dwelling policies issued or renewed on or after July 1, 2025.

Citation: DIFS Bulletin 2024-26-INS, issued under MCL 500.2236(5)

Source: https://www.michigan.gov/difs/-/media/Project/Websites/difs/Bulletins/2024/Bulletin_2024-26-INS.pdf

This is regulatory guidance issued by DIFS under its existing statutory unfair-policy-provision authority rather than a standalone statute enacted by the legislature; it applies to personal lines homeowners and dwelling policies as scoped above.

Recoverable depreciation holdback

No Michigan statute specifically governing the timing or process for paying withheld recoverable depreciation was found.

MCL 500.1605 defines actual cash value (replacement cost minus depreciation and obsolescence) and MCL 500.2117 addresses replacement-cost-vs-market-value disclosure for nonrenewal purposes, but no provision specifically sets a deadline or procedure for releasing recoverable depreciation once repairs are complete. This appears to be governed by individual policy terms rather than statute.

Source: https://www.legislature.mi.gov/Laws/MCL?objectName=MCL-500-1605

RESEARCHED from scratch (prior entry was blank). Same pattern as New York, Illinois, Pennsylvania, and Georgia: no state-specific holdback-timing statute found.

“No damages for delay” clause enforceability

Enforceable, but not where the parties didn't contemplate the extent of delay actually experienced

A Michigan appellate court held that a no-damages-for-delay provision doesn't apply where the parties didn't contemplate the extent of the delay at the time of contracting. In the case establishing this, a subcontractor's work stretched from an originally-planned 6 months to 15 months because of unforeseen site conditions and scope changes; the court held the clause didn't bar the subcontractor's delay claim because the parties hadn't anticipated delay of that magnitude when they signed.

Citation: Phoenix Contractors, Inc. v. Gen. Motors Corp., 355 N.W.2d 673, 676 (Mich. Ct. App. 1984); Macomb Mech. v. Lasalle Grp., No. 319357, 2015 WL 1880189 (Mich. Ct. App. Apr. 23, 2015).

Source: https://50-state.watttieder.com/states/michigan/

RESEARCHED via a detailed 50-state survey (Watt Tieder LLP), confirmed via the primary Macomb Mechanical opinion (fetched directly). Michigan's foundational case is actually Phoenix Contractors, Inc. v. Gen. Motors Corp. (1984), which established the same four exceptions (uncontemplated delay, abandonment, bad faith, active interference) that Macomb Mechanical (2015) later applied.

Construction contract filing deadline

6 years for breach of contract generally; separate 6-year/10-year cap for claims against a builder

Michigan's general catch-all limitations period for breach-of-contract damages is 6 years from accrual. A separate statute specific to licensed architects, professional engineers, contractors and land surveyors instead requires suit within 6 years of occupancy, use, or acceptance of the completed improvement, or 1 year after a defect is discovered or should have been discovered, whichever is later, but never more than 10 years after occupancy, use, or acceptance regardless of discovery.

Citation: MCL 600.5807; MCL 600.5839

Source: https://law.justia.com/codes/michigan/2011/chapter600/act236of1961/236-1961-58/section600-5839

The 600.5839 claims-against-builder period is aimed at injury/defect claims against the specific licensed professionals it names, not necessarily every ordinary payment dispute; confirm which statute actually governs a given claim.

State unemployment insurance (SUTA)

New employers pay 2.7% for their first two years of liability, with rates increasing in years three through five. Experienced employers range from 0.06% to 10.30%. 2026 taxable wage base is $9,000 for employers in good standing, $9,500 for delinquent employers.

Michigan's Unemployment Insurance Agency assigns new employers a 2.7% rate for their first and second years of liability, with the rate increasing in years three through five as additional experience-based components (CBC, ABC, NBC) phase in. Established employers' rates, once fully experience-rated, range from 0.06% to 10.30%. The taxable wage base applies to the first portion of each employee's gross wages each calendar year.

Citation: Michigan Department of Labor and Economic Opportunity (LEO), Unemployment Insurance Agency, Unemployment Tax Rate

Source: https://www.michigan.gov/leo/bureaus-agencies/uia/employers/forms/accordion/taxable-wage-base

Last checked: 2026-08-26

RESOLVED, not actually a discrepancy: confirmed directly against michigan.gov (LEO/UIA's official Taxable Wage Base FAQ and December 2025 Employer Advisor bulletin) that both $9,000 and $9,500 are simultaneously correct, applying to different employer statuses. $9,000 is the reduced wage base for employers who have filed all required quarterly reports and have no unpaid balance (the default MES Act base is actually $9,500, reduced to $9,000 when the UIA Trust Fund balance requirement is met and the employer qualifies); $9,500 applies to delinquent employers. Most employers will see $9,000.

Workers' compensation rating

Michigan does not use NCCI directly. Rates are set through the Compensation Advisory Organization of Michigan (CAOM), the state's own advisory and data organization, which also administers the assigned-risk placement facility.

Michigan workers' compensation rating is handled by the Compensation Advisory Organization of Michigan (CAOM) rather than NCCI. CAOM collects policy, statistical and financial data from carriers, administers experience rating (including modification calculations) and manages the Michigan Workers' Compensation Placement Facility, the state's assigned-risk (residual market) mechanism for employers who cannot obtain coverage voluntarily.

Citation: Compensation Advisory Organization of Michigan (CAOM), About Us

Source: https://caom.com/About-Us

The CAOM page confirms its rating, data-collection and assigned-risk functions but does not itself state explicitly that it operates independently of NCCI; that characterization is based on CAOM being the recognized advisory organization of record for Michigan rather than NCCI.

Prevailing wage law

Michigan has a state prevailing wage law again as of 2023. A 2018 repeal was reversed when Governor Whitmer signed legislation reinstating prevailing wage, effective around March 2024.

Michigan's prevailing wage law has changed status twice in recent years. Michigan's original prevailing wage act (1965 PA 166) was repealed in 2018 following a voter-initiated repeal. Governor Whitmer signed legislation on March 24, 2023 reinstating a state prevailing wage requirement for most state-funded construction projects, including public school construction (subject to certain exceptions for pre-existing millage-funded projects); the reinstated law took effect around March 2024.

Citation: Kerr Russell, Michigan's Reinstituted Prevailing Wage Law Will Go Into Effect Soon

Source: https://www.kerr-russell.com/michigans-reinstituted-prevailing-wage-law-will-go-into-effect-soon/

The exact Michigan Compiled Laws (MCL) citation for the reinstated 2023 law and any specific dollar contract threshold were not confirmed from a primary Michigan.gov source during this research. A separate U.S. Department of Labor summary consulted still described Michigan as having no prevailing wage law due to the 2018 repeal, which is now outdated; reconfirm the current statutory citation and any threshold directly against Michigan LEO or the enrolled bill text before publishing.

OSHA plan

MIOSHA: full state plan, private + public sector

Michigan operates MIOSHA (Michigan Occupational Safety and Health Act), a full OSHA-approved state plan covering both private and public-sector employers.

Citation: 29 U.S.C. § 667; Mich. Comp. Laws § 408.1001 et seq.

Source: https://www.osha.gov/stateplans/mi

Weight of an OSHA violation in a negligence case

Confirmed evidence, not negligence per se: a direct Michigan Court of Appeals holding, reinforced by a real construction-specific case

The Michigan Court of Appeals held that violations of federal OSHA standards and of Michigan's own state-promulgated MIOSHA standards constitute evidence of negligence, reasoning that the purposes of such standards 'overlap with those underlying tort law' (the majority 'some evidence' classification. A separate, directly construction-relevant Michigan Court of Appeals case confirms MIOSHA and federal OSHA standards impose a duty on construction-site defendants to inspect for and remove slip and trip hazards in walkways, showing Michigan courts actively apply these standards to establish the duty element of a negligence claim in construction settings specifically.)

Citation: Sanderson v. Cahill Construction Co., No. 294939, 2011 Mich. App. LEXIS 611 (Apr. 5, 2011); Ghaffari v. Turner Construction Co. (Mich. Ct. App.)

Source: http://www.michbar.org/opinions/appeals/2011/040511/48505.pdf

Third-party contribution against the employer

Statutory-employer status is a live issue to check in Michigan, but the source doesn't detail the test.

Third-party claims otherwise involve premises liability, control, notice, and product defect against owners, contractors, manufacturers, and drivers.

Citation: Mich. Comp. Laws §§418.101 et seq.; Ormsby v. Capital Welding, Inc., 471 Mich. 45 (2004).

Source: https://www.courtlistener.com/opinion/848695/ormsby-v-capital-welding-inc/

Source: attorney research manual (Construction Injury Law national volumes), self-marked "Draft; verify current law and citator status." Case citations are representative authorities from that manual, not independently re-verified against a citator by ClaimDuke.

Injury-severity gate on contribution claims

Exclusivity has a narrow intentional-tort exception under MCL §418.131(1)(b).

Mich. Comp. Laws §§418.101 et seq. generally protects the employer, with the intentional-tort exception in §418.131(1)(b).

Citation: Mich. Comp. Laws §418.131(1)(b); Travis v. Dreis & Krump Mfg. Co., 453 Mich. 149, 551 N.W.2d 132 (1996).

Source: https://www.courtlistener.com/opinion/848695/ormsby-v-capital-welding-inc/

Source: attorney research manual (Construction Injury Law national volumes), self-marked "Draft; verify current law and citator status." Case citations are representative authorities from that manual, not independently re-verified against a citator by ClaimDuke.

Distinctive state doctrine

Common work area doctrine: a GC can be liable for injuries in areas shared by multiple subcontractors' employees, even without directly employing the injured worker, confirmed with the full current 4-element test and citation.

Funk v. General Motors Corp., 392 Mich 91, 220 NW2d 641 (1974) created the common-work-area doctrine. The Michigan Supreme Court narrowed it in Ormsby v. Capital Welding, Inc., 471 Mich 45, 57, 684 NW2d 320 (2004), which set the current 4-element test: the GC (1) failed to take reasonable steps within its supervisory and coordinating authority (2) to guard against readily observable and avoidable dangers (3) that created a high degree of risk to a significant number of workers (4) in a common work area. Failure to establish any one element defeats the claim. Funk was also overruled in part on other grounds by Hardy v. Monsanto Enviro-Chem Systems, Inc., 414 Mich 29, 70-71, 323 NW2d 270 (1982), though the common-work-area doctrine itself survived and was refined, not eliminated, by Ormsby.

Citation: Funk v. General Motors Corp., 392 Mich 91, 220 NW2d 641 (1974); Ormsby v. Capital Welding, Inc., 471 Mich 45, 684 NW2d 320 (2004).

Source: https://www.courts.michigan.gov/49dace/siteassets/case-documents/uploads/opinions/final/coa/20190124_c341193_35_341193.opn.pdf

Verified directly against a Michigan Court of Appeals opinion (courts.michigan.gov) that quotes and applies the current Ormsby-refined 4-element test, and against the original Funk opinion text (case law), rather than relying on a secondary summary.