Workers Compensation Insurance

Quick answer: Workers compensation insurance covers medical expenses, lost wages, rehabilitation, and death benefits when an employee is injured or becomes ill because of their job. Nearly every state requires it once you have even one employee. It is always a separate policy and is not included in a business owners policy or general liability coverage.

At Pro Insurance Group, we quote workers compensation in more than 40 states for offices, contractors, trucking and towing operations, restaurants, assisted living facilities, and businesses of every size. As an independent broker, we compare multiple carriers to match your business with a policy built around your industry, your payroll, and your claims history instead of a single company's rate. Operating in Illinois? Start with our Illinois workers compensation guide for state requirements, penalties, and costs.

What Workers Compensation Insurance Covers

Workers compensation insurance protects both your employees and your business when a workplace injury or illness occurs.

For your employees, a workers comp policy covers medical expenses related to a work injury or illness, a portion of lost wages during recovery, physical and vocational rehabilitation costs, and death benefits for dependents in the event of a workplace fatality.

For your business, workers comp provides liability protection if an injured employee files a claim. Without coverage, that liability falls directly on you. With coverage, the policy absorbs the claim and your business assets remain protected.

Workers compensation covers injuries and illnesses that arise out of and in the course of employment. This includes acute injuries such as falls, lacerations, and equipment accidents, as well as occupational illnesses that develop over time such as repetitive stress injuries, hearing loss, and exposure-related conditions.

Every standard workers compensation policy also includes employers liability coverage, known as Part Two, which defends your business when an employee injury turns into a lawsuit instead of a routine claim.

What Workers Compensation Does Not Cover

Workers compensation does not cover injuries that occur outside of work, including during an employee's commute. It does not cover injuries caused by employee intoxication or intentional self-harm. It also does not cover independent contractors, though employers should be careful here: misclassifying an employee as an independent contractor to avoid workers comp obligations is a common compliance mistake with serious legal consequences in most states.

Is Workers Compensation Required by Law?

Nearly every state requires workers compensation once you hire your first employee, whether full time or part time. The details vary: states differ on exemptions for owners, officers, and LLC members, on how independent contractors are classified, and on penalties for going without coverage. Texas is the main outlier, where coverage is optional for most private employers.

Because we write coverage in more than 40 states, we track these requirements so you do not have to. If you operate in Illinois, where enforcement is among the strictest in the country, see our dedicated Illinois workers compensation page for the state's requirements, exemptions, benefit levels, and penalties.

How Workers Compensation Rates Are Calculated

Workers comp premiums are based on three primary factors.

Your industry classification code reflects the risk level of your type of work. Every job type is assigned a code by the National Council on Compensation Insurance, and each code carries a corresponding base rate. A landscaping company, a law firm, and a manufacturing plant all carry different rates because their employees face different levels of physical risk.

Your total payroll is the base on which your premium is calculated. The higher your payroll, the higher your base premium. This is why accurate payroll tracking and correct employee classification matter — both affect what you pay.

Your experience modification rate, or ex-mod, is a multiplier based on your actual claims history compared to similar businesses. A clean claims history produces an ex-mod below 1.0 and lowers your premium. Frequent claims push it above 1.0 and increase your costs. Managing workplace safety is not just a liability issue. It directly affects what you pay for coverage every year.

Why Employers Choose Pro Insurance Group

Pro Insurance Group is an independent insurance brokerage serving employers throughout Illinois and nationwide. Unlike captive agents who represent a single carrier, we work with multiple carriers across the workers compensation market to find the right combination of coverage, service, and price for your business.

We review your current policy for classification errors, audit discrepancies, and coverage gaps that may be costing you money. We also help businesses with prior claims access specialty markets that standard carriers won't write — giving you options that a single-carrier agent simply cannot provide.

We write workers compensation in more than 40 states nationwide. Our offices in Elgin and Huntley, IL anchor our home market, where we serve businesses throughout Elgin, Huntley, Schaumburg, Naperville, Rockford, Aurora, and the rest of Illinois.

Get a Free Workers Compensation Review

If your workers comp policy is renewing in the next 90 days, or if you have never had an independent review of your current coverage, now is the right time. A 15-minute conversation with our team can identify savings opportunities, confirm your classifications are correct, and make sure your coverage actually protects your business when a claim occurs. In most cases we can bind coverage within 24 to 48 hours of receiving your business information. 

Request a free workers compensation quote today.

Frequently Asked Questions