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.
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 Illinois 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.
Illinois Workers Compensation Requirements
Illinois requires virtually all employers with one or more employees to carry workers compensation insurance. This includes full-time employees, part-time employees, and seasonal workers. Corporate officers and LLC members who actively work in the business are also covered unless they formally elect to exempt themselves in writing.
The only businesses that may be exempt are sole proprietors with no employees and business partners with no employees. Even in those cases, the exemption is not automatic — it must be properly documented.
Illinois does not allow employers to self-insure unless they meet strict financial requirements set by the Illinois Workers' Compensation Commission. For the vast majority of Illinois businesses, a commercial workers comp policy through a licensed carrier is the required path.
How Workers Compensation Rates Are Calculated
Workers comp premiums in Illinois 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 Illinois 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.
Our offices in Elgin and Huntley, IL serve businesses throughout Elgin, Huntley, Schaumburg, Naperville, Rockford, Aurora, and throughout Illinois. For businesses outside Illinois, we write workers compensation coverage in most states nationwide.
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.
Request a free workers compensation quote today.
Frequently Asked Questions
Is workers compensation insurance required in Illinois? Yes. Illinois requires virtually all employers with one or more employees to carry workers compensation insurance under the Illinois Workers' Compensation Act. Penalties for non-compliance include fines up to $500 per day and stop-work orders.
Does workers comp cover part-time employees in Illinois? Yes. Workers compensation requirements apply regardless of whether employees are full-time, part-time, or seasonal.
Can I exempt myself as a business owner in Illinois? Corporate officers who own at least 25% of the company may elect to exempt themselves from coverage, but this must be done in writing. Sole proprietors with no employees are generally not required to carry coverage for themselves.
What happens if a subcontractor is injured on my job site? If the subcontractor does not carry their own workers comp policy, you may be liable for their injury under Illinois law. Always verify certificates of insurance before allowing subcontractors to begin work.
How quickly can Pro Insurance Group bind workers comp coverage? In most cases we can bind workers compensation coverage for an Illinois employer within 24 to 48 hours of receiving the required business information.
Does Pro Insurance Group write workers comp outside of Illinois? Yes. We write workers compensation coverage for employers in most states nationwide, with a focus on commercial lines clients across the US.
