Illinois law specifies that all businesses with employees must have workers’ compensation insurance, with limited exceptions. This policy provides medical benefits for workers who are injured on the job.
Every business in Illinois with employees is required to carry workers’ compensation insurance, including businesses with part-time employees. Illinois law requires employers to purchase a policy through an insurance company or obtain permission to self-insure.
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Even when it's not required by law, workers' comp is a wise choice because of the protection it provides. This policy covers the cost of medical treatment for work injuries – which is crucial since health insurance can deny work-related injury claims.
Sole proprietors, business partners, corporate officers, and members of limited liability companies can exempt themselves from workers' compensation requirements. Independent contractors in Illinois are not eligible for workers' compensation benefits.
The exception is businesses that engage in hazardous work, including construction and trucking. These businesses are required to have workers’ comp coverage for all individuals, regardless of whether they are sole proprietors, independent contractors, or owners.
To save money on workers' comp insurance, it's important to make sure you classify your employees correctly. Employees with desk jobs or other jobs with a low risk of injury cost less to insure. This also helps you avoid misclassification fines.
In some cases, small business owners can choose to buy pay-as-you-go workers' compensation. This type of workers' comp policy has a low upfront premium, and lets you make payments based on your actual payroll instead of estimated payroll. It's useful for businesses that hire seasonal help or have fluctuating numbers of employees.
Finally, a documented safety program can help lower workers' comp costs. A safer workplace means fewer accidents, which helps keep your premium low.
When an employee suffers a work-related injury or occupational illness, they are eligible for workers' compensation benefits. Workers' comp can help cover the cost of medical treatment. It also provides payments while injured employees are unable to work.
In Illinois, workers' compensation coverage includes:
Policies usually include employer's liability insurance, which can help cover legal expenses if an employee blames their employer for an injury. However, the exclusive remedy provision in most workers' comp policies prohibits an employee from suing their employer if they accept workers' comp benefits.
When employees are injured at work, they are required to inform the employer within 45 days of the event.
The employer is then obligated to inform the workers’ compensation insurance carrier or administrator. If the employee cannot work for more than three days because of the injury, the employer must also:
The Illinois Workers’ Compensation Commission (IWCC) facilitates workers’ comp claims.
There are serious penalties for failure to comply with workers' compensation laws. Penalties under the Illinois Workers' Compensation Act include:
If a person dies as a result of an injury on the job, their dependents are entitled to receive workers’ compensation death benefits. Illinois allows for benefits to a deceased worker’s:
If the deceased worker does not have any of these survivors, benefits might go to another family member, including parents, adult children, or grandchildren.
Workers’ compensation death benefits in Illinois are allocated with weekly payments. An eligible dependent could receive up to two-thirds of the deceased person’s average weekly wage, within the minimum and maximum amount established by the state each year. Benefit payments end after $500,000 or 25 years.
Workers’ compensation death benefits can also be used for funeral expenses up to $8,000.
Most workers’ compensation settlements result in a lump-sum payment. Illinois allows payment installments over time in two ways:
Although a settlement usually means that the worker has closed their rights to workers’ comp benefits, sometimes medical rights are kept open if the person is likely to require extensive future medical treatment as a result of the injury.
The State of Illinois includes the following for its workers’ comp statute of limitations:
If the injury is from ongoing or repetitive trauma, and not a specific incident, then the date of injury is considered to be the date on which a reasonable person would have become aware of the injury and the fact that it was caused by employment.
If you are ready to explore workers’ comp insurance options for your Illinois business, fill out Insureon's free online application today to compare quotes from top-rated providers. Our licensed agents can help you find the right insurance policies for your small business.