Illinois Workers’ Compensation Insurance: Providers, Rules & More

Workers’ compensation insurance is required by law in most states. Policies cover injured employees’ medical bills and lost wages and death benefits if an employee dies from a workplace incident. In Illinois, employers must get coverage even if they have a single, part-time employee and pay an average of $1.12 per $100 of payroll.

The Hartford is a top provider of Illinois workers’ compensation coverage, offering policies for over 200 business types. Business owner can have coverage in place just five minutes after getting a quote, and they can save money with a number of discounts.

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Illinois Workers’ Compensation Insurance Providers

Most Illinois employers need to purchase coverage from a private insurer. If you can’t find an insurer to cover your business, then you can enroll in what’s called a market of last resort operated by the National Council of Compensation Insurers. Premiums in this market can be 50% higher than the private market.

Top Illinois Workers’ Compensation Insurance Providers

The Hartford

The Hartford is a small business specialist with some of the broadest workers’ compensation insurance in Illinois. The company’s basic policy automatically includes six unique features, including coverage for reasonable expenses you incur in your defense and coverage for employees and volunteers when state law doesn’t require it.

Additionally, The Hartford offers discounts for paying your premium in full or carrying multiple lines. Plus, business owners can create additional savings through programs that encourage wellness or provide discounts on slip-resistant shoes, ergonomic office furniture, and employee screening services. This makes The Hartford the ideal choice for business owners who want broad coverage at a discount.

AP Intego

AP Intego is an online agency that uses technology to simplify commercial insurance for small business owners. It offers essential coverages in seven industries and prides themselves on its customer service. Workers’ compensation insurance is its top product, and it can offer multiple quotes to compare.

Business owners who want to eliminate surprises during their workers’ comp audit should look at AP Intego. Not only can the company quote the coverage in Illinois, but it also offers a pay-as-you-go system that integrates with your payroll service easily. This way, your workers’ comp premium is based on your actual payroll and paid automatically.

Employers

Employers is a financially stable national carrier that specializes in workers’ compensation insurance for small businesses. This means they have resources to cover a wide range of industries, but they also have deep experience in the workers’ comp exposures most business owners face.

The company was recently named as the preferred workers’ comp provider for the Illinois Restaurant Association. Restaurants are the largest business class written by Employers, and now owners who are members of the Illinois Restaurant Association (IRA) can get a 5% discount on their workers’ compensation insurance.

WorkCompOne

WorkCompOne is an insurance agency that works with top carriers like Markel, Travelers, and CNA to bring workers’ comp to small business owners. The company operates solely online, which means business owners can apply for coverage and get questions answered on their own schedule.

The smaller your business, the harder it can be to find workers’ comp coverage. Insurers avoid small accounts because they take just as much work as the large ones but bring in less money. However, WorkCompOne’s relationships with multiple carriers allow them to quote business even when they have 10 or fewer employees.

AmTrust Financial

AmTrust Financial has only been around for 20 years but, in that time, they’ve grown to be one of the largest commercial insurers. They are a financially stable company with a segment dedicated to small business.

AmTrust Financial is an ideal insurer for startups because they’re one of the few carriers that will insure a new venture. Carriers usually shy away from new ventures because they have a hard time predicting the chance of paying claims, but AmTrust Financial can cover startups in multiple industries.

Additional Illinois Workers’ Compensation Insurance Options

Illinois employers have two additional workers’ compensation insurance options. The first is self-insurance. This means they pay the costs of workers’ comp claims out of their own pocket or by entering a pool with other employers. Business owners who cannot self-insure or get coverage from a private company are placed in an assigned risk plan.

Illinois Workers’ Compensation Self-Insurance Requirements

Employers who want to self-insure must submit an application to the Illinois Workers’ Compensation Commission (IWCC). The applicant must also provide current financial statements and a plan for how they will investigate, administer, and pay claims. Applying cost $500, plus there is a minimum security of $200,000 required. Employers must apply for renewal every year.

The application process takes at least 60 days, and business owners with employees must have workers’ compensation and keep it in place until they’re approved as a self-insurer.

Illinois Workers’ Compensation Insurance Assigned Risk Plan

Business owners who cannot find coverage in the private market can turn to Illinois’ assigned risk plan. This is sometimes called a market of last resort. The plan is administered by the National Council of Compensation Insurers (NCCI). Typically, policies from the NCCI cost about 50 percent more than the ones purchased in the open market.

New ventures and startups, especially those in emerging industries, can have a hard time getting workers’ compensation insurance. However, businesses may also be declined if they’re in risky industries or if they have a history of claims. Once two insurers have declined coverage, employers can work with an agent to get workers’ comp through the NCCI.

What Workers’ Compensation Insurance Is

Workers’ compensation insurance is designed to get employees reimbursements for injuries and reduce lawsuits for employers. Most states require that employers purchase workers’ comp policies to cover their employees’ replacement wage; medical bills like doctor visits, prescriptions, and rehabilitation; and funeral costs. Workers’ comp pays benefits without taking account who is at fault.

In exchange for this coverage, employees give up their right to sue their employers for workplace injuries in most cases. They may still be able to bring a civil suit if their employer was negligent or intentionally harmed them. These cases trigger part two of workers’ compensation, employer liability coverage. It pays for the employer’s legal bills if an injured employee files a lawsuit.

Understanding what workers’ compensation insurance covers is an important part of protecting your business as it grows. Learn more about the coverage in Workers’ Compensation Insurance.

What Workers’ Compensation Insurance Covers

Workers’ compensation insurance pays for workplace injuries and occupational illnesses. This includes injuries caused by immediate trauma, repetitive stress, and exposure to harmful materials. However, injuries have to occur in the course of employment to be covered, like a carpenter falling from a ladder, to be compensable.

Most states exclude injuries that stem from:

• Horseplay, like a Springfield secretary’s post-traumatic stress disorder after an office prank
• Drug and alcohol use, like a Joliet bartender’s slip and fall after drinking shots with patrons
• Voluntary events, like a Chicago copywriter’s broken ankle during the all-company softball game
• Not wearing safety gear, like a Naperville construction worker’s head injury if they aren’t wearing their helmet

Each state has its own definition of what types of injuries and illnesses are covered, most of which is determined by case law. It’s usually the particulars of any situation that determines if injuries are compensable. Preserving a record of the incident is essential for deciding if benefits are appropriate.

Illinois Workers’ Compensation Insurance Costs

Illinois has some of the highest workers’ compensation rates in the United States, averaging between $2 and $2.49 per $100 of payroll. Workers’ comp insurers come up with the total cost by assigning a rate based on the risk each employee faces in their job and your company’s claims history.

The steps insurers use to determine workers’ compensation insurance costs include:

• Assign employees a classification based on their job
• Assign each classification a rate based on its risk
• Multiply the classification rate per $100 of your payroll
• Multiply the rate again by your experience modification factor

The experience modification factor compares your company’s loss history and payroll to similar businesses. Fewer and less-expensive claims typically mean lower premiums for your company.

Illinois Workers’ Compensation Audit Requirements

Premium audits can be a lot of work. Even worse? They often result in extra premium due at the end of your policy term. However, your insurer can charge up to 200% of your premium if you don’t comply. Illinois business owners who believe they’ve been treated unfairly during an audit can appeal.

Here are a few of the documents you may need for a workers’ compensation audit in Illinois:

• Payroll journal
• Federal tax reports
• State unemployment tax reports
• Overtime payroll records
• Employee records, like timecards and position descriptions
• Description of your business operations
• Payments to subcontractors and casual laborers
• Certificates of insurance for subcontractors and independent contractors

Illinois workers’ compensation premiums are based on your payroll. However, as you hire and fire people throughout the year, your payroll and, therefore, your workers’ comp premiums change.

For these reasons, pay-as-you-go workers’ compensation insurance, like the plan AP Intego offers, is a popular option for small business owners. Its platform integrates with your payroll service so that you end up paying a premium based on your actual payroll rather than an estimate made months earlier.

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Illinois Workers’ Compensation Insurance Laws

The Illinois Workers’ Compensation Act (IWCA) claims employers to carry workers’ compensation in almost every employment situation. Employers must carry coverage even if they only have a single, part-time employee. Most get workers’ comp through private insurers. If they don’t, they can face civil and criminal penalties, starting at $500 for every day without coverage.

Illinois workers’ compensation law does address a few unique work situations, including:

• Coverage for the business owner: Most sole proprietors, business partners, corporate officers, and members of a limited liability corporation may opt out of workers’ comp; they must notify their carrier in writing if they do
• Coverage for high-risk industries: Employers are required to have workers’ compensation for themselves if they are in a high-risk industry, like construction or trucking at a construction site
• Coverage for domestic workers: Workers’ comp is required for household staff when they work a minimum of 40 hours per week for at least 13 weeks a year
• Coverage for employees who are family members: Workers’ comp is required for family members unless they live with the employer or are farmers with employees who work a total of fewer than 400 working days a quarter

Solopreneurs, such as independent contractors, freelancers, and sole proprietors without employees, may still want workers’ compensation to protect their businesses when a job-related injury keeps them from working. Learn more in Workers’ Compensation for Self-employed individuals.

What Illinois Workers’ Compensation Insurance Covers

Illinois workers’ compensation insurance coverage is required by law to pay for the costs that come with occupational diseases and job-related injuries. Without workers’ comp, Illinois employers may have to cover injured employees’ medical bills and lost wages out of their own pocket. In addition, they could end up paying hefty fines.

What’s covered varies by situation, but workers’ compensation in Illinois usually covers:

• Traumatic physical injuries: These are typically the result of a sudden accident like a fall from a ladder or being crushed by machinery
• Repetitive stress injuries: This category includes injuries from overuse like carpal tunnel from computer work or a bad back from lifting heavy objects
• Occupational diseases: An occupational disease is a condition a worker contracts because of their work situation like a coal miner having black lung disease; stress-related heart disease can fall into this category too
• Mental injuries: There are two types of mental injuries; the first is caused by a physical injury like a blow to the head; the other is the result of mental strain like insomnia after a workplace shooting

Illinois workers’ compensation laws do not cover injuries that occur during recreational event or drug and alcohol rehab programs. They also don’t cover self-inflicted injuries or injuries suffered while an employee is committing a crime or violating company policy.

Most business owners need additional policies. You can find a list of common coverage in our ultimate guide to business insurance.

Illinois Workers’ Compensation Insurance Deadlines

In Illinois, there are three main deadlines employers need to be aware of. The most important is to have workers’ compensation insurance in place by the time they hire employees. There is no grace period. Other significant deadlines for employers are notification requirements.

A few key deadlines for Illinois workers’ compensation insurance include:

• Coverage needs to be in place immediately upon hiring employees
• Two days to notify the IWCC of work-related deaths
• One month to notify the IWCC of work-related injuries that cause more than three days’ absence

Employees also have deadlines to meet when an accident occurs. They have 45 days to report an injury, or they risk losing out on their workers’ comp benefits, except in cases of radiation exposure, pneumoconiosis, asbestosis or similar diseases. Additionally, employees must file their injury claim with the IWCC either within three years of the injury date or two years from the date of their last benefit payment, whichever is longer.

Illinois Workers’ Compensation Insurance Requirements

In addition to providing coverage for most employees, Illinois law places other obligations on employers. Perhaps the most important for employers is either paying benefits once an employee has missed three work days or explaining why benefits have been withheld. Paying or accepting benefits does not waive anyone’s right to dispute a future claim.

Some Illinois workers’ compensation insurance requirements include:

• Posting this notice in their workplace with their insurer’s name, contact information, and policy number
• Keeping records of all work-related illnesses and injuries that require medical treatment beyond first aid or result in a loss of consciousness, restriction of motion, or transfer of job
• Keeping records of any work-related deaths
• Refraining from harassing, discriminating, or terminating any employee who files a claim
• Refraining from charging employees for their workers’ compensation benefits or premiums
• Reporting any workplace injuries that result in more than three lost workdays to the IWCC
• Reporting any workplace death to the IWCC within two days

Remember, If a job-related injury keeps an employee out of work for more than three days, the employer must do one of two things. Their first option is to start making temporary total disability payments. Their second option is to give the employee a written explanation of either the information they need to start making payments or the reasons benefits are being withheld.

Penalties for Noncompliance with Illinois Workers’ Compensation Law

Failure to carry workers’ compensation coverage in Illinois is usually a misdemeanor. If the employer is shown to have knowingly failed to comply, then the charge is a felony. Employers can be fined up to $500 for every day of noncompliance. The minimum fine is $10,000.

In addition to the fine, employers who knowingly fail to carry workers’ comp lose the protections they have under the IWCA. Employees can sue them in civil court, plus the IWCC may order the employer to stop all operations.

How to File a Workers’ Compensation Claim in Illinois

In Illinois, as in most states, injured employees initiate workers’ comp claims. This is because they’re the ones seeking compensation from their employer or their employer’s insurer. However, employees don’t have to file a claim to receive benefits.

The steps to an Illinois workers’ compensation insurance claim are:

• The employee alerts the employer of their injury or illness: This needs to be done promptly but no later than 45 days from the incident or 90 days from the diagnosis; oral notification is sufficient, but written notification is preferable
• The employer records the employee’s information: The state doesn’t supply an official accident report form, but employers are responsible for recording all workers’ compensation workplace injuries and occupational diseases and submitting reports to the IWCC electronically
• The employer provides instructions on obtaining medical care: Illinois workers have the right to select their medical providers unless their employer is in a preferred provider plan; then, they must select a doctor in the PPP network
• The employer either pays benefits or explains why they aren’t paying benefits: Workers’ comp benefits start when an injured employee misses three or more days of work; however, the employer or their insurer may withhold benefits; if they do, the need to send written notice explaining why or what information they need to begin payments
• The employee files a claim with the IWCC: Employees are not required to file a claim with the Commission, but many do, especially if their denied benefits or hope to protect their right to benefits in the future

The IWCC arbitrates disputed workers’ comp claims. In a dispute, employers do not have to disprove an employee’s claims. The employee has the burden of proof, so they must demonstrate they have a right to benefits.

Tips on Getting Illinois Workers’ Compensation Insurance

Here are a few tips for getting workers’ compensation insurance in Illinois:

Classify Your Employees Correctly

Business owners need to be careful about job class, says Jared Staver of Staver Accident Injury Lawyers, P.C.

“As a workers’ comp attorney in Illinois, the biggest mistake that I see when employers are getting workers’ comp insurance is thinking some employees are excluded and not properly paying premiums. My best tip for getting workers’ comp insurance is to count all employees
carefully. Some of the people you consider to be independent contractors may be considered employees.”

The IRS offers guidelines for identifying independent contractors correctly,

Pay Legitimate Workers’ Compensation Claims

Employers sometimes resist paying workers’ compensation claims. They may be worried about the repercussions of accepting blame for a workplace injury, or they’re afraid of the impact on their premiums. However, they should balance those concerns against the time and money they might have to spend on disputing claims.

Staver recommends business owners think twice before going to court.

“Claims should be covered liberally instead of shelling out thousands in legal fees to defend or deny a claim. You protect yourself when you cover a legitimate injury on the job.”

Manage Your Workers’ Compensation Risk

Insurers consider your past claims when they set your premiums, so you want to use safety protocols to reduce the chance of worker injury. However, your actions after a workplace accident can also reduce workers’ comp claims. Employees are often less likely to sue when their employer demonstrates concern for their well-being.

Get Multiple Quotes for Workers’ Compensation Insurance

Workers’ comp rates may be guided by the National Council of Compensation Insurers, but insurers still apply their own calculations when determining the premium. Brokers contract with multiple business insurance carriers, so they can help you compare rates. That way, you can get affordable workers’ comp insurance.

Illinois Workers’ Compensation Insurance Frequently Asked Questions (FAQs)

Getting workers’ compensation insurance is an essential part of protecting your business. We’ve answered a few of the most commonly asked questions below. If you don’t see yours, please post it to our forum or the comment section below.

1. Do Out-of-State Employers Have to Provide Illinois Workers’ Compensation Insurance?

The IWCA claims jurisdiction if an employee’s injury occurs in the state, regardless of where the employee was hired. It also covers employees if an injury occurs outside of the state if they were either hired in Illinois or their primary operations are in Illinois.

2. What Is the Statute of Limitations for Workers’ Comp in Illinois?

Employees in Illinois have two potential deadlines for filing a workers’ comp claim. First, state law requires they notify their employer of their injury within 45 days. Second, the statute of limitations for filing their claims is either within three years from the date of injury or two years from the last compensation payment.

3. How Long Can an Employee Receive Workers’ Compensation Benefits in Illinois?

The length of Illinois workers’ compensation benefits depends on the type of injury. Illinois has four benefit categories: permanent total, permanent partial, temporary total, or temporary partial. There is no cap on benefits for permanently and totally disabled individuals. Additionally, employers must develop a plan for injured employees to return work after 120 days.

Bottom Line

Workers’ compensation insurance is expensive in Illinois, but it’s a requirement for most business owners. More importantly, it protects your business by covering costs that you would be liable for as an employer. Take steps to keep your costs down by emphasizing safety in the workplace and getting quotes from multiple carriers.

The Hartford can help Illinois business owners find affordable workers’ compensation insurance. Its application process takes just minutes to complete, and it offers discounts for upfront premium payments.

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