Workers’ Compensation Insurance: It’s the LAW.
Illinois law requires employers 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 Illinois employees are covered under the Act.
A n employer that knowingly and willfully fails to obtain insurance may be fined up to $500 for every day of noncompliance, with a minimum fine of $10,000. Corporate officers can be held personally liable if the company fails to pay the penalty. Since 2006, the Commission has collected over $7 million in fines. This provides workers the proper legal protection and other employers a more fair competitive arena. Fines are deposited into the Injured Workers’ Benefit Fund.
FREQUENTLY ASKED INSURANCE QUESTIONS
Disclaimer:This information is not intended to be a full exposition of the insurance provisions of the Workers Compensation Act. For more information, we suggest you contact an attorney knowledgeable about workers compensation.
Questions for employers
Questions for employees
How many employees does an employer have to have to come under the Act?
If you have one employee, even a part-time employee, you must obtain workers’ compensation insurance. There are rare exceptions; see Section 3 of the Act or consult an attorney.
Do employees who are family members have to be insured?
they are corporate officers; or
they work for an agricultural enterprise that employs less than 400 working days of labor per quarter during the preceding calendar year, exclusive of working hours of the employer’s spouse and other members of his or her immediate family residing with him or her.
Statute: Sections 3(17)(b) and 3(19)
Is there a waiting period for workers compensation coverage?
No. From the moment they are hired, employees are covered by the Workers’ Compensation Act and must be insured.
What are the penalties if an employer fails to carry workers’ comp insurance?
A n employer that knowingly and willfully fails to obtain insurance may be fined up to $500 for every day of noncompliance, with a minimum fine of $10,000. 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, c orporate officers who are found to have negligently failed to obtain 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.
An employer that knowingly fails to obtain insurance loses its protections under the 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. In addition, during the trial the burden will be upon the employer to prove it was not negligent.
The 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.
Statute: Section 4(d)
I am a sole proprietor/business partner/corporate officer/member of a limited liability company. Do I have to buy w.c. insurance?
The short answer is no, but the full answer is a bit longer. In summary, sole proprietors* and business partners may elect to come under the Act or they may choose not to.
There is a twist, though, in Section 3 of the Act. It provides that employees who engage in extra hazardous* occupations must be covered under the law–but then subsections 3(17) and 3(20) allow sole proprietors, corporate officers, business partners, and members of limited liability companies to opt out.
In summary, if you are a sole proprietor, business partner, corporate officer, or member of a limited liability company, and.
you want to come under the Act, you must purchase insurance for yourself to be covered for a work-related injury or illness.
How do I know if my employer has workers compensation coverage?
By law, employers must post a completed workers compensation notice in a conspicuous place in every work site. You have a right to know this information. If you do not see this notice, please contact us (312/814-6611).
You may also search online for coverage information.
My employer does not have workers’ compensation insurance. What should I do?
If you suspect an employer does not have insurance, you may search our online insurance database. email our Insurance Compliance Division. or call our Information Unit (312/814-6611 or toll-free within Illinois 866/352-3033). We will try to identify the carrier; if we cannot find any evidence of insurance coverage, we will ask the employer to provide proof of insurance. but will not mention the name of the informant.
If I report my employer, do I have to give my name?
No. Anyone reporting an employer may remain anonymous.
Will my group health plan or occupational disability insurance cover workers’ compensation cases?
No. Group health, occupational disability, general liability, disability or property insurance will not cover workers’ compensation liability. Only a workers compensation policy fulfills this requirement. This coverage must be purchased from a carrier authorized to write workers’ compensation insurance in Illinois.
Who can I contact if I still have insurance compliance questions?
Manager of Insurance Compliance