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Illinois Workers’ Compensation Insurance

You can save up to 25% in discounts on business insurance.*

Workers’ Compensation can help pay for:

Medical expenses

Medical expenses

Includes examinations, treatments and rehabilitation.

Lost wages

Lost wages

Gives employees time to recover from an injury before returning to work.



Helps employees who need to learn skills and enter a new field.

Permanent injury

Permanent injury

Provides benefits for employees who can no longer work due to injury.

Is Workers’ Compensation insurance required in Illinois?

Illinois state law requires workers’ compensation insurance for every business with employees, even if you only have one part-time staff person.

Business owners that work in construction, including sole proprietors who don’t have employees, are also required to have a workers’ comp policy.

Workers’ compensation insurance in Illinois can help you pay for expenses related to an injury if you or an employee are hurt on the job. It can help cover:

  • Medical care for a job-related injury
  • Rehabilitation expenses
  • Temporary, partial or permanent disability benefits for lost wages
  • Death benefits

Employers in Illinois must post a notice with information on their workers’ compensation insurance provider and details on their employees rights if there is a workplace injury. If there is an injury where an employee misses more than three days of work, it must be tracked and reported to the Illinois Workers’ Compensation Commission.

Who is exempt from Workers’ Compensation insurance in Illinois?

You may be exempt from Illinois workers’ compensation requirements in Illinois if you are:

  • A sole proprietor who doesn’t work in construction or another hazardous industry
  • A partner in a business
  • A corporate officer or a member of a limited liability company

However, if you opt-out of coverage, your out-of-pocket expenses after a workplace accident could end up being more than the total cost of your premium for a year of insurance.

Employees who are family members are not exempt from workers’ compensation insurance unless they are corporate officers — for example, serving as the CEO or CFO of your business if you set it up as a corporation.

What types of businesses buy Workers’ Comp in Illinois?

More than 90% of the state’s employees have workers’ compensation coverage, according to the Illinois Workers Compensation Commission.

Construction businesses are required to have it due to the high-risk nature of that industry, but every business can benefit from the protection it offers — and it’s required if you have employees.

For example, if you hire a part-time assistant to help with administrative tasks, they could file a claim after straining a back muscle while lifting a box. If you don’t have workers’ comp insurance, you would be responsible for paying for related medical bills, and you could face penalties from the state for being out of compliance.

What does Workers’ Comp cover in Illinois?

Workers’ compensation provides critical benefits for business owners, including coverage up to your policy limit for medical costs after job-related injuries or diseases, including:

  • Any physical ailment caused by work
  • Injury due to repetitive use of a body part
  • Stroke or heart attack that is work-related
  • Pre-existing medical conditions made worse by work

Illinois workers’ compensation income benefits activate when an employee cannot work for more than three days due to a job-related injury. 

After a claim is approved, payments are made based on the statewide average weekly wage set by the Illinois Department of Employment Security. They generally fall under three categories:

Temporary total disability

Temporary total disability is an insurance industry term used when an employee cannot work for a period of time due to a job-related injury or illness. For example, if an employee who performs regular physical labor hurts his back and cannot work for three weeks while the injury heals, he is experiencing a temporary total disability.

If you or one of your employees suffers temporary total disability, you can receive a maximum of about $1,500 per week.

Permanent partial disability

Permanent partial disability occurs after an employee experiences a job-related injury that will prevent them from performing work duties at the same level as before the injury.

For example, if you operate a landscaping business, an employee could experience a shoulder injury while working on a property that never fully recovers. That employee might not be able to ever trim overhead vegetation again, but they could perform other landscaping duties.

If you or one of your employees experiences a permanent partial disability, Illinois workers’ compensation sets the maximum weekly benefit at $670.

Permanent total disability and death benefits

Permanent total disability is an insurance industry term used when an employee will never be able to work again due to a job-related injury or illness. Permanent total disability benefits to provide weekly wage payments to a disabled employee for 25 years or up to $500,000, whichever is greater.

The family members (spouse and children) of an employee who dies due to an on-the-job accident, will receive the same weekly wage payments as an employee with permanent total disability.

What are the penalties of not having Workers’ Compensation in Illinois?

The penalty for not providing workers’ comp as required by state law can be severe. Business owners who don’t provide coverage could be faced with a stop-work order and $10,000 fine. Criminal charges could be filed in extreme cases.

Businesses that don’t provide workers’ comp also lose important liability protections. That means an injured employee could sue, and legal judgments would be paid out of pocket, potentially bankrupting a business after a serious injury.

How much does Workers’ Compensation insurance cost in Illinois?

A variety of factors can influence your workers’ compensation insurance costs. The risk of a job-related injury is more significant in some professions than in others, which is one key component of workers’ comp pricing.

Other factors that can influence the cost of workers’ compensation insurance include:

Start a free instant quote with NEXT Insurance to find out how much workers’ compensation insurance will cost for your business. You’ll just need to answer a few basic questions about your business to get your quote. If you see an option you like, you can purchase coverage and have a certificate of insurance in about 10 minutes.

Other business insurance policies to consider

Workers’ compensation insurance provides many important protections for your business, but you’ll also need to consider additional coverage to include with your Illinois business insurance package to make sure you protect your company from unnecessary risks. Most Illinois businesses also consider these insurance options:
We typically recommend:
General Liability
General Liability Insurance

General liability insurance protects your business from common mistakes or accidents that can occur in your industry, such as damage to someone’s property or a customer injury. You can add tools and equipment insurance to this policy for extra protection if you are a contractor or cleaning business owner.

Commercial Auto
Commercial Auto insurance

Commercial auto insurance is required for all business-owned vehicles in Illinois. If you’re driving and using your personal vehicle for work-related purposes, commercial auto insurance also protects your business from unexpected expenses related to an accident.

Errors & Omissions
Professional Liability insurance (aka E&O insurance)

Professional liability insurance provides financial protection against claims of professional mistakes or negligence.

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Let’s find the coverage you need for your business

Business insurance is divided into different policies. We offer seven types so it's easy to design the coverage that fits your business.

General Liability insurance
General Liability

Protect yourself from accidents that cause physical injury or damaged property.

Professional Liability or Error and Omissions Insurance
Professional Liability/E&O

Shield yourself from lawsuits that claim your work errors caused financial losses.

Workers' Compensation Insurance
Workers’ Compensation

Cover medical bills and lost wages if your employees have an accident at work.

Commercial Auto Insurance
Commercial Auto

Stay on the road with coverage for dents, tows and damage to someone else’s vehicle.

Tools & Equipment Insurance
Tools & Equipment

Upgrade your general liability coverage to protect any gear that’s stolen, damaged or lost.

Commercial Property Insurance
Commercial Property

Keep your building, inventory and equipment protected from fire or water damage.

Business Owner’s Policy Insurance
Business Owner’s Policy

Combine general liability and commercial property into one policy to protect your business.

Check out our blog
The difference between Workers' Comp vs. disability insurance

The difference between Workers' Comp vs. disability insurance

What is a Workers’ Compensation audit?

What is a Workers’ Compensation audit?

Workers’ Compensation laws every business owner should know

Workers’ Compensation laws every business owner should know

* To the extent permitted by law, applicants are individually underwritten, not all applicants may qualify. Individual rates and savings vary and are subject to change. Discounts and savings are available where state laws and regulations allow, and may vary by state. Certain discounts apply to specific coverages only.
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Issuance of coverage is subject to underwriting. Not available in all states. Please see the policy for full terms, conditions and exclusions. Coverage examples are for illustrative purposes only. Your policy documents govern, terms and exclusions apply. Coverage is dependent on actual facts and circumstances giving rise to a claim. Next Insurance, Inc. and/or its affiliates is an insurance agency licensed to sell certain insurance products and may receive compensation from insurance companies for such sales. Policy obligations are the sole responsibility of the issuing insurance company. Refer to Legal Notices section for additional information.