Who Has to Have Workers' Compensation Insurance in Illinois?


Workers' compensation insurance is not optional for businesses under Illinois state law. Though this does pose a financial burden on employers, the law is designed to protect employees who get injured or sick from performing regular work duties. Without workers' compensation insurance, they may not be able to afford the medical attention they need to return to health.


In Illinois, all businesses with at least one employee must carry a valid workers' compensation insurance policy or meet another of the state's accepted methods of coverage. Even if your employee is only part time, you must provide coverage. There is no waiting period, so from the moment your employee first begins work, you are required to carry the appropriate insurance protection. You may face penalties if you are caught in violation of this law.


Virtually every business in Illinois is required to provide insurance coverage, though there are a few exceptions. If you own an agricultural business, you may be exempt. If you employed fewer than 400 working days of labor per quarter in the previous calendar year, you do not need to provide coverage. That means the total number of days each of your employees worked added together must be fewer than 400. Also, real estate brokers, broker-salesmen and commission-only salespeople are not considered employees under the Illinois Workers' Compensation Act.

Business Owners

If you are a sole proprietor, a partner or an executive officer of a corporation, you do not need to purchase workers' compensation insurance coverage for yourself. If your business has no employees, you can avoid a policy altogether. However, if you do purchase a policy that covers your employees, you must either buy coverage for yourself and your fellow owners, or exclude yourself from the policy in writing.


Illinois takes its workers' compensation laws seriously. Your business can be fined up to $500 per day you are without required coverage, with a minimum fine of $10,000. If the business fails to pay this fine, you can be held personally liable for the debt, even if you are a corporate officer of the company. Additionally, you can be charged with and found guilty of a misdemeanor for failing to provide the necessary coverage; if it is proved that you willingly and knowingly refused to provide coverage, the charge escalates to a felony.

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