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Michigan contract-frustration coverage guide

In a published dispute over Chinese and U.S. government measures affecting a fixed-price polysilicon take-or-pay agreement, the Michigan Court of Appeals held that market-price collapse and unprofitability did not connect the alleged government acts to a contractual failure to perform; the buyer had accepted that price risk. A later unpublished lease decision likewise treated government restrictions on gym operations separately from the tenant’s continuing rent obligation. Buyers should identify the affected duty and the contract’s risk allocation before treating a political event as contract frustration; these rulings do not decide insurance coverage. 1,2

What Is Contract Frustration?

Contract frustration may fit your business when an international contract is exposed to political disruption or government action. If your main risk is a customer who cannot pay, compare trade-credit coverage instead. Read the national Contract frustration guide.

What to Watch for in Michigan

  • Show how the government act prevents the promised performance

    Kyocera involved long-term take-or-pay commitments for polysilicon and alleged Chinese and U.S. government actions in the solar market. The published court decision rejected a theory based on economic adversity and an unprofitable fixed price where the pleading did not connect the government acts to inability to perform the contract’s payment or purchase duty. 1

  • A price swing can be the very risk a take-or-pay deal allocates

    The court read the agreement as placing market-price deflation risk on the buyer, which had promised to pay for a set quantity at the agreed price. It explained that government-caused market movement did not rewrite that allocation. A buyer considering political-risk protection should isolate a direct government barrier from ordinary price and margin loss. 1

  • A business closure did not itself excuse a separate rent payment

    In an unpublished 2024 lease decision, the court held that COVID closure orders restricted a fitness center’s operation but did not prevent its act of paying rent. The opinion is nonprecedential; it offers a fact-specific illustration, not a general rule about all leases or all force-majeure clauses. 2

Who Regulates Insurance in Michigan

Michigan Department of Insurance and Financial Services

The Michigan Department of Insurance and Financial Services licenses agents, agencies and companies, supervises insurance business, and helps resolve complaints. You can use its state lookup or complaint service to check a license or raise an insurance issue. 3,4,5

Surplus-lines tax and stamping office

Reported tax rate: 2.5% combined surplus-lines tax and regulatory fee on premium when Michigan is the insured's home state Michigan's Property and Casualty Guaranty Association is funded by insurers authorized to transact in the state; an insurer procured solely under Chapter 19 is expressly not considered authorized for that chapter. The surplus-lines policy must carry a notice that the insurer is not Michigan-licensed and insolvency claim payment may not be guaranteed. 6,7,8

Providers With Documented State Licenses

No provider in Spot’s research documents both a state license record and this coverage line. This does not establish that providers are unlicensed. Check the regulator’s license lookup and confirm availability with a provider when requesting a quote.

Questions to Ask Before You Buy in Michigan

  1. Which exact obligation would the named government act stop: delivery, export, purchase, acceptance, payment or another promise?
  2. Does the agreement put fixed-price, take-or-pay, market-price or alternative-source risk on us, and can we document that allocation?
  3. Would a proposed policy cover direct inability to perform the identified contract, or does it exclude lost profit, price decline, payment risk or delay?

Contract Frustration in Michigan: FAQ

Did the Michigan court hold that government action can never trigger force majeure? 1

No. Kyocera turned on the pleaded link between the asserted government conduct and the duties in a specific take-or-pay agreement. It distinguished a direct effect on contractual performance from market-price adversity and unprofitability. 1

Do these Michigan contract cases promise an insurance recovery? 1,2

No. They address defenses to performance under the underlying agreements. A policy has separate definitions, insured interests, exclusions and proof requirements that must be checked against the actual contract and event. 1,2

Contract Frustration in Other States

Other Coverage in Michigan

Sources

  1. Kyocera Corp. v. Hemlock Semiconductor, LLC, 313 Mich. App. 437 (2015). Michigan Court of Appeals; Published opinion, pp. 4–8; force-majeure clause, government actions, anti-dumping duties and take-or-pay allocation. Accessed 2026-09-28.
  2. Fitness International LLC v. Cole La Bloomfield Hills (Feb. 22, 2024). Michigan Court of Appeals; Unpublished per curiam opinion, pp. 5–7; lease force-majeure wording, restrictive law and rent payment. Accessed 2026-09-28.
  3. Department of Insurance and Financial Services. Department of Insurance and Financial Services; Official regulator and insurance oversight. Accessed 2026-09-28.
  4. Insurance License Lookup. Department of Insurance and Financial Services; State-designated producer/company search. Accessed 2026-09-28.
  5. File an Insurance Complaint. Department of Insurance and Financial Services; State complaint process and contact. Accessed 2026-09-28.
  6. Surplus Lines Licensee: Filing the Surplus Lines Taxes. Michigan Department of Insurance and Financial Services; DIFS current filing page: Michigan-home-state placements taxed at 2.5% combined tax and regulatory fee; separate fees charged to insured are not included in premium tax base. Accessed 2026-09-28.
  7. Michigan Insurance Code, Chapter 500. Michigan Legislature; MCL 500.7911(1)-(2), 500.7921(b): association membership tied to insurer authorized to transact; insurer procured solely under Chapter 19 is expressly not authorized for guaranty chapter. Accessed 2026-09-28.
  8. Michigan Insurance Code, Chapter 500. Michigan Legislature; MCL 500.1922 requires policy notice that insurer is not Michigan-licensed and insolvency claim payment may not be guaranteed. Accessed 2026-09-28.
  9. Licenses. At-Bay; Current producer introduction and state table; At-Bay Insurance Services LLC; P&C and surplus-lines identifiers. Accessed 2026-09-21.
  10. Licenses and Carriers. Coalition; Licenses and Carriers, re-read 22 September 2026: Insurance Licenses table for Coalition Insurance Solutions, Inc., national producer number 18419475, with producer and surplus-lines numbers for all 50 states and DC including California 0L76155, Georgia 196479, Texas 2199630 and 2205589, Pennsylvania 815731 and 817452, Colorado 539028 and Wisconsin 3000108852. Insurance Carriers table naming, with NAIC numbers, Allianz Underwriters Insurance Company 36420, Arch Specialty Insurance Company 21199, Ascot Specialty Insurance Company 45055, Ascot Insurance Company 23752, Aspen Specialty Insurance Company 10717, Chaucer Insurance Company DAC, Coalition Insurance Company 29530, Fireman's Fund Indemnity Corporation 11380, Fortegra Specialty Insurance Company 16823, Lloyd's of London, MSIG Specialty Insurance USA Inc. 34886, MS Transverse Specialty Insurance Company 41807, Steadfast Insurance Company 26387, Vantage Risk Specialty Insurance Company 16275 and Zurich American Insurance Company 16535. Accessed 2026-09-22.
  11. Insurance Producer Licenses. Corgi Insurance; Current complete Insurance Producer Licenses table for Corgi Insurance Services, Inc.; 50 rows covering 49 states and DC (DC 3003091619); no New Mexico row; no NPN or as-of date shown. Accessed 2026-09-28.
  12. About Hiscox US Insurance. Hiscox; Hiscox Insurance Company Inc. NAIC 10200 as Chicago, IL domiciled insurer admitted or licensed in all 50 states and D.C.; Hiscox Inc. as general agent and Lloyd’s coverholder for Syndicates 33 and 3624; surplus-lines placements through licensed surplus-lines brokers; A.M. Best rating statement. Accessed 2026-09-16.
  13. Licenses. ERGO NEXT Insurance; Current entity-by-state license table reopened 28 September 2026: 50 rows under Next First Insurance Agency, Inc., including Washington, DC; New York rows instead list Next Insurance Services PC-1423070 and AP Intego BR-1198885. Accessed 2026-09-28.
  14. Insurance Licenses by State. TechInsurance; Current state table; identifies TechInsurance as a division of Specialty Program Group LLC d/b/a SPG Insurance Solutions; lists DC 3000041536 and labels Rhode Island “Individual licenses,” without an agency license number. Accessed 2026-09-28.
  15. Licenses. Vouch; Effective 16 January 2025: Vouch Specialty Insurance Services, LLC, NPN 19926463; P&C table (50 states and DC); surplus-lines table includes Idaho 870820; footnote says Georgia and Idaho do not issue agency-level surplus-lines licenses; Idaho retained as producer-only due to conflict. Accessed 2026-09-15.

Updated .

This guide is informational and does not determine whether a policy is available or meets your needs. Editorial policy. To suggest a correction, contact Spot with a supporting source.

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