Buying workers’ compensation for:


State Fund: No

Insurance Coverage Requirements: Workers’ Compensation is compulsory in Illinois. Waivers are not permitted.

Who is Required to Purchase Workers’ Compensation Coverage?

Illinois law requires employers to provide workers’ compensation coverage for their employees. Almost everyone who is hired, injured, or whose employment is localized in Illinois is covered by the law and should be insured by his or her employer. Sole proprietors, business partners, and members of limited liability companies may exempt themselves.

Agricultural workers are covered who are employed by an individual employer for 400 or more aggregate man-days in any quarter during the preceding calendar year; exclusive of the employer’s spouse and other members of his/her immediate family residing with him/her.

Workers’ Compensation also covers any domestic worker or workers employed for a total of 40 or more hours per week for a period of 13 or more weeks during a calendar year by any household or residence.

Factors that Impact Coverage

  • You are a sole proprietor or partner: In Illinois, you are excluded from coverage but have the option to include yourself.
  • You are a corporate officer: You are included in coverage in Illinois but can opt to be excluded.
  • You are a member of an LLC: Illinois excludes you from coverage, but you have the option to include yourself.
  • You work in construction, trucking or other "extra hazardous" industry: According to new state law, in almost all instances you must have coverage, even if you are a sole proprietor, corporate officer or member of an LLC.

Failure to Secure Compensation

An employer that negligently fails to provide coverage is guilty of a Class A misdemeanor for each day without coverage, punishable by up to 12 months imprisonment and a $2,500 fine. An employer that knowingly fails to provide coverage is guilty of a Class 4 felony for each day without coverage, punishable by 1-3 years imprisonment and a $25,000 fine. An uninsured employer may be also fined up to $500 for every day it lacked insurance, with a minimum $10,000 fine. Corporate officers can be held personally liable if the company fails to pay the penalty.

An uninsured employer loses the protections of the Workers’ Compensation Act for the period of noncompliance. That means an employee who was injured during the period of noncompliance may choose to sue in civil court, where there are no limits to awards.

In addition, if the Commission finds that an employer knowingly failed to provide insurance coverage, it may issue a stop-work order and shut the company down until it obtains insurance.

Proof of Coverage is Required

All employers must post a notice in each workplace that explains workers’ rights under the Workers’ Compensation Act and lists the insurance carrier, policy number, contact information, etc. The employer must post in a conspicuous place in the place of employment, a printed or typewritten notice stating whether he is insured or whether he has qualified and is operating as a self-insured employer.

Independent Contractors

Mistakenly classifying an employee as an independent contractor can result in significant fines and penalties.

View 20 factors used by the IRS and our independent contractor questionnaire to determine whether you have enough control over a worker to be an employer.

Other Tips

If your insured employs workers in multiple states or your insured’s employees are temporarily working out-of-state, they need to purchase insurance for all the states where their workers are located, according to each state’s laws. Call 1-800-476-2948 and let us walk you through it.

The nature of your insured’s business, number of employees being covered and past coverage and claims are all factors in how much their premium will cost.