What are the requirements for small business insurance in Illinois?
In Illinois, every business with employees – even those with only one part-time employee – must provide workers’ compensation coverage. Sole proprietors and business partners can purchase workers’ comp for themselves, but they are not required to do so. Commercial automobile insurance is also a requirement for any company that uses vehicles for business purposes such as client visits, deliveries, or equipment transportation.
Although it’s not a state-mandated requirement, professionals who work out of a rented space may be asked by their landlord to provide proof of liability coverage such as general liability insurance or commercial property insurance before they can sign a lease. Other types of insurance are also optional but recommended, such as professional liability insurance for lawyers, doctors, and other experts who give professional advice to their clients. This type of insurance is also called errors and omissions insurance.
Because Illinois has dram shop laws, establishments that sell or serve alcohol can be held responsible for injuries and property damage caused by intoxicated individuals. That's why liquor liability insurance is so important for small businesses that sell alcohol in Illinois. It covers the costs of damaged property or medical expenses caused by an individual who became intoxicated at your business.
Insureon is licensed in Illinois; our headquarters are in Chicago. To determine which policies your company could benefit from, complete our application for free insurance quotes. The application takes 15 minutes or less, and you’ll receive quotes from several top-rated insurance carriers.
Find out more about insurance in your field
Your insurance needs vary depending on your industry. For example, accountants and IT consultants may decide to invest in cyber liability insurance to help protect sensitive client information. Our experts look at the whole picture – your business risks, assets, and other factors – to determine which types of insurance are appropriate for your company. To find out more, select your industry from the list below, or fill out our 15-minute application to determine which policies are a good choice.
Small business insurance policies in Illinois
In Illinois, the policies most often purchased by small businesses include:
General liability insurance
To protect against customer injuries, lawsuits, and customer property damage, small businesses can purchase general liability insurance. Landlords and clients may also ask for verification of general liability before they will enter into a lease or contract with you. This coverage helps when:
- A landscaping company damages a customer’s walkway with a lawnmower.
- A client trips over a package left on the doorstep of a private business.
- A customer blames a salad purchased from a grocery store for a bout of food poisoning.
Commercial property insurance helps protect physical assets such as your inventory, equipment, and building. If a crime or an accident results in loss or damage, this type of insurance helps with the resulting expenses. For instance, commercial property insurance helps when:
- A photographer’s camera breaks during a photo shoot.
- A valuable painting is stolen from an art gallery.
- A sprinkler system malfunctions and destroys a boutique's inventory.
Workers’ compensation insurance
Illinois state law requires all businesses with employees, even only one part-time employee, to purchase workers’ compensation insurance. If a workplace injury or occupational illness causes an employee to miss work, workers’ comp can help cover the cost of medical procedures and partial lost wages. This coverage helps when:
- An electrician in a utility company suffers an electric shock from inadequate insulation.
- An employee at a landscaping company develops a rash from harsh pesticides.
- A worker at a warehouse develops back pain from repetitive lifting.
Professional liability insurance (errors and omissions insurance)
For experts who provide specialized advice to their clients, professional liability insurance can help cover legal costs when a client is dissatisfied or your recommendations result in financial loss. This insurance helps when:
- You break the terms of a client's contract.
- Your error results in a client's revenue loss.
- You miss a deadline, negatively impacting a client’s business.
Cyber liability insurance
A security breach can result in tremendous financial loss to you and your clients if personal information is exposed. In Illinois, businesses affected by a breach may be required to notify affected customers as well as the Illinois Attorney General’s Office. To help with both the cost of notification and other expenses related to the breach, many small businesses that work with sensitive information opt for cyber liability insurance. This type of insurance helps cover:
- Data breach notification costs.
- Forensic investigation into the cause of the breach.
- Credit monitoring for parties affected by the breach.
- Legal expenses if you’re sued for not preventing the breach.
Business owner’s policy (BOP)
Not all businesses are eligible for a business owner’s policy (BOP). A business owner’s policy combines a general liability policy with property insurance at a lower rate than if the policies were purchased separately. You may be able to purchase a BOP if:
- You work in a low-risk industry.
- You have fewer than 100 employees.
Commercial auto insurance
Businesses that depend on delivery vans or other vehicles must purchase commercial auto insurance. This policy helps cover:
- Repairs to the other driver’s car in an accident.
- The other driver’s medical expenses due to injury.
- Legal expenses that result from an accident.
- Repairs to a vehicle damaged by theft, weather events, or vandalism.
Illinois business insurance licensure information
In Illinois, insurance agents, agencies, and brokers are licensed by the Illinois Department of Insurance. Insureon is licensed in Illinois as BIN Insurance Holdings LLC (NPN 15752926) for property and casualty insurance (license #100289220). To verify our licensure in Illinois, use the National Association of Insurance Commissioners Lookup Search. Enter "Illinois" in the Jurisdiction field and "Licensee" in the Search Type drop-down window; change Entity Type to "Business Entity" and enter our NPN or license number in the appropriate field.