If you operate a business in the State of Illinois and have what can be considered an employee and a payroll over $1,000 a year, you are required by law to either carry workers compensation insurance, be approved as a self-insurer or join a group self-insurance program. Although everyone is welcome to obtain coverage, some types of businesses are exempt under law. These exceptions include (but aren’t limited to) sole proprietors and partners, certain agricultural businesses, real estate brokers and commission-only sales people. Here is some basic information to consider when looking for Illinois workers compensation insurance policy.
Independent contractors and subcontractors who don’t have their own Illinois workers compensation insurance are considered employees. If they’re injured while doing work for you or your business and file a claim, you are liable and will be charged by your Workers Comp insurance carrier for the premiums. Protect yourself by obtaining certificates of workman’s comp insurance from any of your freelance workers.
If you’re an executive officer in your corporation, you can elect to forgo workman’s comp insurance in Illinois. Just make sure that there is an endorsement on your policy.
Shopping for Illinois workers compensation insurance quotes can be time-consuming. You can speed up the process by getting quotes online. But, before you sign anything, get a detailed written proposal from each carrier you’re considering. Your workers’ comp insurance quotes should include:
- Limits and Exclusions
- Payroll, sales, rates and classifications affecting your premiums and coverage
Your Illinois workers comp insurance premiums are calculated by assigning classifications based on the type of business operated. Each classification has a specific rate per hundred dollars that will be applied to remuneration. Your policy will start with estimated remuneration (typically based on payroll), and be adjusted by an audit once actual remuneration is determined. According to the Illinois Insurance Commission, if you’re paying $5,000 or more in annual premiums, your premiums can be further adjusted by applying the Experience Modification Factor, calculated annually by the National Council on Compensation Insurance and based on your specific prior loss and payroll data.
Illinois also maintains an assigned risk pool to help you get workers compensation insurance when carriers don’t want to underwrite it. The rates will be higher in and there won’t be any premium discount, but you will have workman’s comp coverage that protects you from liability, law suits and costly penalties.