Michigan Bill Proposes $1M Liability Insurance Mandate for Gun Dealers Selling to Prohibited Buyers

**TL;DR:** Michigan lawmakers have introduced legislation requiring gun dealers to carry at least $1 million in liability insurance. This mandate would apply specifically to sales where a firearm is transferred to a legally prohibited buyer.

Michigan legislators are advancing a new bill designed to enhance accountability within the state's firearm retail sector. The proposed Gun Seller Liability Act, introduced by Representatives Brenda Carter and Kara Hope along with eight co-sponsors, mandates that licensed gun dealers secure at least $1 million in liability insurance.

This insurance would specifically cover personal injury or property damage resulting from a gun sale to an individual legally prohibited from possessing a firearm. Representative Brenda Carter stated the bill's aim is to allow victims of gun violence to pursue civil damages in situations where they currently lack legal recourse. She clarified that the legislation targets sellers who illegally sell firearms, rather than the gun industry as a whole. Currently, no U.S. state has enacted a statewide law that requires all gun sellers to carry liability insurance. Lawmakers in California, Connecticut, and Maryland have previously introduced similar legislation, but none has passed into law.

The bill marks a significant legislative attempt to establish civil liability for specific illegal sales. A similar bill introduced by House Democrats in 2023 did not advance past the Criminal Justice Committee, indicating prior legislative hurdles for such proposals. The current legislation has met with opposition, with organizations expressing concerns about potential increases in operational costs for smaller gun retailers. For instance, an East Lansing attorney representing the Michigan Coalition of Responsible Gun Owners stated the bill would raise the cost of doing business, also noting that dealers already comply with federally mandated criminal background checks and face potential lawsuits for negligence. This new bill is part of a broader legislative effort in Michigan to strengthen accountability measures for firearm ownership and sales. This larger initiative includes recently enacted universal background checks, safe storage laws, extreme risk protection orders, and proposed bans on untraceable “ghost guns.” The bill currently awaits consideration in the Government Operations Committee. Its progression will indicate evolving legislative approaches to gun seller responsibilities within the state.