Illinois Workers’ Compensation

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What can be covered by Illinois Workers’ Compensation insurance?

Medical expenses

Medical expenses

Like exams, treatment and rehabilitation.
Lost wages

Lost wages

For employee recovery after a work injury.


To teach injured employees new skills if they can no longer do their jobs.
Permanent injury

Permanent injury

Benefits for employees who can no longer work due to injury.

Table of Contents

Is Illinois Workers’ Compensation insurance required?

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

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

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

Employees who are family members are not exempt from workers’ compensation insurance unless they are corporate officers.

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How does Workers’ Comp work?

Workers’ compensation insurance in Illinois can help business owners pay for expenses related to an injury if an employee is 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 employees’ rights if there is a workplace injury.

If an employee misses more than three days of work due to a work injury or illness, it must be tracked and reported to the Illinois Workers’ Compensation Commission.

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

  • A 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.

For example, if a part-time administrative assistant strains a back muscle while lifting a box, they could file a claim. 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.

After a claim is approved, payments are made based on the statewide average weekly wage. They generally fall under four categories:

  • Temporary total disability is when an employee cannot work for a period of time due to a job-related injury or illness. For example, if an employee hurts their back and can’t work while the injury heals, this is a temporary total disability. Employees receive a maximum of about $1,500 per week.
  • Permanent partial disability is when an employee has a job-related injury that prevents them from performing work duties at the same level as before. For example, a shoulder injury that never fully recovers might prevent a landscaper from trimming overhead vegetation, but they could perform other duties. Illinois workers’ compensation sets the maximum weekly benefit at $670.
  • Permanent total disability is when an employee will never be able to work again due to a job-related injury or illness. Benefits pay weekly wage payments to a disabled employee for 25 years or up to $500,000, whichever is greater.
  • Death benefits are covered if a worker dies from a work-related injury. Family members (a spouse and children) will receive the same weekly wage payments as an employee with permanent total disability: 25 years or up to $500,000, whichever is greater.

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 a $10,000 fine. Criminal charges could be filed in extreme cases.

Businesses that don’t provide workers’ comp also lose important liability protection. Without Illinois workers comp, an injured employee could sue a business, and legal judgments would be paid out of pocket. In the event of a serious and costly injury, the expense could potentially bankrupt a business.

Learn more about workers’ compensation coverage.

How much is Illinois Workers’ Compensation?

Workers’ compensation costs vary across industries. Factors that influence price include:

  • The number of employees and the type of work they do.
  • Your total payroll.
  • Your insurance claims history.
  • The locations where you do business.

Get a free instant quote in about 10 minutes from NEXT to see your workers’ comp insurance costs.

Who is exempt from Illinois Workers’ Compensation insurance?

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 (LLC).

If you opt-out of coverage, your out-of-pocket expenses after a workplace accident could be more than the total cost of your insurance premium for a year.

How NEXT helps Illinois small business owners

NEXT offers an easy way to get a free workers’ compensation insurance quote, purchase coverage and instantly share a certificate of insurance in about 10 minutes.

NEXT strives to resolve every claim quickly. Learn more about our claims process and how our claims advocates will work with you after an employee injury.

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Other important small business insurance policies in Illinois

Workers’ compensation insurance provides many important protections, but you’ll need additional coverage to protect from all the risks your small business can face.
Many Illinois small businesses also consider:
General Liability
General Liability insurance

General liability insurance protects your business from common mistakes or accidents, such as customer injury or damages to someone’s property.

Commercial Auto
Commercial Auto insurance

If you or your employees drive vehicles for work, commercial auto insurance is required in Illinois. This provides coverage for accident-related expenses in a business-owned vehicle or a personal vehicle being used for work purposes.

Commercial Property
Commercial Property insurance

Commercial property insurance can provide financial help if your business structures, goods, gear or inventory are damaged or destroyed by a covered event.

Errors & Omissions
Professional Liability insurance

Professional liability insurance, also called errors & omissions insurance, provides financial protection against claims of professional mistakes and negligence.

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* 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.

Any starting prices or premiums represented before an actual customer quote are not guaranteed and are representations of existing premiums of active policies as of December 6, 2023. 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.