What are the legal requirements for workers’ comp insurance in Illinois?

Illinois law requires business owners to provide workers’ compensation insurance for almost everyone who is hired, injured, or whose employment is localized in Illinois. Sole proprietors, business partners, corporate officers, and members of limited liability companies may exempt themselves. Overall, it is estimated that 91% of all Illinois employees are covered under workers’ compensation insurance.

What are the penalties if an employer fails to carry workers’ comp insurance in Illinois?

An Illinois business owner that knowingly and willfully fails to obtain workers’ comp insurance may be fined up to $500 for every day of noncompliance, with a minimum fine of $10,000. Business owners or corporate officers can be held personally liable if the company fails to pay the penalty. Since 2006, the Commission has collected over $8 million in fines.

In addition, corporate officers who are found to have negligently failed to obtain workers’ comp insurance are guilty of a Class A misdemeanor; if they are found to have knowingly failed to obtain insurance, they are guilty of a Class 4 felony.

A business owner that knowingly fails to obtain workers’ compensation insurance loses its protections under the Illinois Workers’ Compensation Act. An employee who is injured during the time the employer was uninsured may sue the employer in civil court, where benefits are unlimited. Additionally, during the trial the burden will be upon the employer to prove it was not negligent.

The Illinois Workers’ Compensation Commission may issue a work-stop order on an employer that has been found to have knowingly failed to provide insurance. The employer must then stop all business operations until it provides proof of insurance.

What types of injuries are covered with workers’ comp insurance in Illinois?

Illinois state law determines what types of injuries are covered, but there are general guidelines that can help you understand what typically qualifies for a workers’ comp claim.

These include:

• No intentional self-harm, harm that results from drug or alcohol use, or fighting. 
• Must fall within the “course and scope” of employment. If you get into a fender bender on your way home from work after you’ve clocked out for the day, that’s unlikely to qualify.  
• Long-term occupational injuries, including back strain from repetitive motion. When you think of work-related injuries, you probably think of one-time events — but damage can occur over a long period of time. As long as the injury or illness is clearly associated with the employee’s work responsibilities, it may be eligible.