Illinois · state requirements

Workers’ comp insurance in Illinois

For Illinois employers with even one part-time worker: what the law requires, what going uninsured costs, typical premiums and what to have ready for a quote.

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What similar businesses pay

Workers comp, Illinois: About $56 a month
Workers comp, national: About $54 a month
Illinois premium index rate: $1.34 per $100 of payroll

Published benchmarks, not quotes. Your price depends on underwriting.

Cost

What workers’ comp insurance in Illinois costs

About $56 a month

Workers comp, Illinois

Insureon figure for Illinois customers ($669 a year), updated April 2026

About $54 a month

Workers comp, national

Insureon median for all customers ($643 a year), updated April 2026

$1.34 per $100 of payroll

Illinois premium index rate

Oregon DCBS 2024 state ranking: 13th highest, 123% of the study median

About $179 a month

Workers comp, construction

Insureon national figure for construction businesses, updated April 2026

Insureon reports that its Illinois customers, most with fewer than five employees, pay about $56 a month, or $669 a year, slightly above its $54 national figure. Illinois rates sit above the national middle: Oregon’s 2024 ranking puts the state 13th highest, at $1.34 per $100 of payroll and 123% of the study median, up from 19th in 2022. For January 1, 2026, NCCI proposed a 1.2% cut in Illinois loss costs. Your premium follows payroll and job class, so a two-person office can pay little while a roofing or trucking crew pays many times more; Insureon’s national figure for construction businesses is about $179 a month.

What moves your price

Your job classification codes: residential carpentry, roofing and trucking rate far above clerical work
Total payroll, since premium is figured per $100 of payroll and audited after the policy year
Your experience mod, which Insureon says applies once annual premium reaches $5,000
Whether you buy in the voluntary market or the assigned risk pool, which the IWCC says costs about 50% more
Uninsured subcontractors, whose payroll can be charged to you at audit
Work in other states and whether Illinois is listed as a primary state on the policy

Illinois

What’s different in Illinois

One part-time employee triggers the law

The IWCC says an employer with one employee, even part time, must carry workers comp, and coverage starts the moment someone is hired. Family members must be insured too unless they are corporate officers or work for a small agricultural employer.

Fines start at $10,000 and can land on officers

Knowingly going uninsured can bring up to $500 a day with a $10,000 minimum under 820 ILCS 305/4(d), and the Commission can assess it against corporate officers, directors and partners personally. The Department of Insurance says repeat violators face up to $1,000 a day, $20,000 minimum.

Going uninsured can be a felony

Negligently failing to insure is a Class A misdemeanor and knowingly failing a Class 4 felony, with each day a separate offense. The IWCC handbook puts the maximums at 12 months and $2,500, and 1 to 3 years and $25,000.

Work-stop orders, even before a hearing

After a hearing, the Commission can stop all operations at a site until you prove coverage. For businesses the Act calls extra hazardous, including construction, trucking, warehouses, bars and beauty shops, a Commissioner can order a stop before any hearing.

Injured workers can sue an uninsured employer

An employer that knowingly fails to insure loses the Act s protection. The IWCC says the worker can sue in civil court, where benefits are unlimited and the employer must prove it was not negligent.

An out-of-state policy may not count

A December 2025 Department of Insurance bulletin warns that listing Illinois only in Item 3C, the other-states section, can leave a claim uncovered. Insurers have denied claims on that basis, leaving the employer to pay and exposed to penalties.

Coverage

Coverage Illinois businesses need

Workers compensation (Part One)

Pays the benefits the Illinois Act sets: medical care, temporary total disability at two-thirds of the average weekly wage within state limits, permanent disability awards and death benefits, which the IWCC says run 25 years or $500,000, whichever is greater.

How workers’ compensation works →

Employer s liability (Part Two)

Helps pay legal costs if an employee sues over a work injury that comp benefits do not fully cover. Check its limits against what your contracts require.

How workers’ compensation works →

Illinois listed as a primary state

If you are based elsewhere but do any work in Illinois, the IWCC says your policy must include Illinois. The Department of Insurance advises listing it in Item 3A, not only in 3C.

How workers’ compensation works →

Coverage for owners

Sole proprietors, partners, corporate officers and LLC members may exclude themselves, but then have no comp benefits of their own. To be covered, you must buy coverage for yourself.

How workers’ compensation works →

Assigned risk pool coverage

If no insurer will write you, the Illinois assigned risk plan run by NCCI is the market of last resort. It wrote 2.4% of Illinois comp premium in 2025, preliminary Department of Insurance figures show; residential carpentry and trucking were its most common classes.

How workers’ compensation works →

Rules

Illinois requirements

Illinois requires virtually every employer to insure its full workers’ comp liability, with only narrow exceptions in Section 3 of the Act. The Commission enforces coverage and the Department of Insurance investigates uninsured employers.

Requirement	Applies to	What it means
Coverage required	Employers with one or more employees, including part-time	Insure or self-insure under 820 ILCS 305/4(a); no minimum headcount, per the IWCC.
Civil penalties	Employers that knowingly fail to insure	Up to $500 a day, $10,000 minimum, under 820 ILCS 305/4(d); repeat violations up to $1,000 a day, $20,000 minimum, per the Department of Insurance.
Criminal liability	Individual employers, officers, partners and LLC members	Class A misdemeanor if negligent, Class 4 felony if knowing, each day a separate offense, under 820 ILCS 305/4(d). Officers of publicly owned corporations are excluded.
Owner opt-out	Sole proprietors, partners, corporate officers and LLC members	May elect out under Sections 3(17) and 3(20); if you insure other employees, notify the carrier in writing under Section 3(17)(b).
Liability for uninsured subs	Construction, excavation, electrical and structural businesses that hire contractors	Under 820 ILCS 305/1(a)(3), you owe comp to a sub s employees unless the sub is insured with an authorized carrier.
Construction workers presumed employees	Construction contractors	Under 820 ILCS 185/10, unless the contractor proves the Act s test. Penalties up to $1,000 per violation, $2,000 for repeats within 5 years, per worker per day (185/40).
Illinois situs rates	Employers primarily in building and construction, wherever based	Premium must be paid at Illinois rates for Illinois projects; penalties up to $1,000 a day, capped at $50,000 per project, under 820 ILCS 305/4(a-1).
Illinois on the policy	Out-of-state employers doing any work in Illinois	Coverage must include Illinois under Section 1(b)2, per the IWCC; Company Bulletin 2025-22 advises listing it in Item 3A.
Notice and injury reports	All covered employers	Post the Commission s notice at each workplace. File Form 45 within two working days for a death and within one month for injuries causing more than three lost workdays, per the IWCC handbook.

Compare workers’ compensation options in Illinois.

One application, quotes from several insurers, reviewed by a licensed agent. Start with your email and finish later if you need to.

Pay less

How to lower the cost

Compare several quotes: the IWCC notes Illinois has let insurers set their own rates since 1983 and has more comp writers than any other state. Florin is an independent broker that compares options from several insurers.
Check each employee s class code before binding, since premium is the class rate times payroll per $100 and is audited later.
Collect a current certificate from every subcontractor so their payroll is not added to yours at audit or under Section 1(a)(3).
Keep coverage continuous and claims low to stay in the voluntary market; the IWCC says assigned risk premiums run about 50% higher.
If owners do not want coverage, give the carrier written notice under Section 3(17)(b) rather than assuming they are excluded.

Before you start

What underwriters ask for

Legal entity type, FEIN and every Illinois work location
Estimated annual payroll split by job duty
Number of full-time, part-time and seasonal employees
Names of owners, officers or LLC members and whether each will be covered
Every state where you work or send employees
Subcontractor list with certificates of insurance
Loss runs from current and prior insurers
Your experience modification worksheet, if you have one

Common questions

Workers’ comp insurance in Illinois: questions

Do I need workers comp in Illinois for one part-time employee?

Yes. The IWCC says one employee, even part time, requires coverage from the day of hire. Only rare exceptions in Section 3 of the Act apply.

Do LLC members and sole proprietors have to cover themselves?

No, they may exempt themselves. The IWCC warns that construction and trucking businesses should check the Employee Classification Act, which in almost all instances requires them to insure.

Am I liable if my subcontractor has no workers comp?

In construction, excavation and electrical work, generally yes. Under 820 ILCS 305/1(a)(3), a business that hires a contractor owes comp to that contractor s employees unless the contractor is insured.

Can I treat my truck drivers as independent contractors?

A label alone does not work. The IWCC cites Roberson v. Industrial Commission, where the Illinois Supreme Court held that calling a trucker an independent contractor, even in a written lease, does not remove the duty to insure.

How do I check whether a business has workers comp in Illinois?

The IWCC s insurance page links to an online coverage search. Employers must also post the Commission s workers comp notice at every work site.

What if no insurer will write my policy?

You or your agent can apply to the Illinois assigned risk plan, administered by NCCI. The IWCC says premiums there cost about 50% more than the open market.

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Sources (15)

Figures are published third-party estimates, not quotes. Coverage depends on policy terms and underwriting, and rules vary by state. Updated October 2026.