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Workers’ compensation (comp) insurance in Illinois is required for nearly all businesses. In 2015, according to the US Bureau of Labor Statistics (BLS), Illinois experienced 3.2 million work-related injuries and illnesses in all industries including state and local government, and of those injuries, 172 were fatal. Needless to say, it is quite important for all businesses, regardless of size, to consider workers compensation insurance.
Workers’ Compensation Insurance
Workers’ compensation is the right of nearly every worker in the state of Illinois and the responsibility of nearly every employer to provide adequate and appropriate coverage. It is important to note that workers’ comp is not simply to protect the employee, but rather it is also in place to protect the business.
Employees are protected so that if they become injured or ill on the job, they will be compensated for their medical bills and at least some of their lost wages in the case they are unable to continue to work for any period of time.
Employers may pay for the insurance;however it is often significantly less than if you had to pay for these expenses at cost and out of pocket. Workers’ comp begins the day of employment and as such, once an employee begins working and accepts workers’ comp insurance benefits, they are no longer able to sue you pertaining to any injury or illness incurred at work.
Workers’ Comp in Illinois
In Illinois, if you have one employee, you must have workers’ compensation insurance. The number of hours they work a week is irrelevant. If you have one employee, you must have insurance for them period. A few exceptions do exist; however, they are quite rare.
The governing body of all workers’ compensation-related matters is the Illinois Workers’ Compensation Commission (IWCC). In Illinois, workers’ comp is considered a no-fault system. This means that employers agree to pay benefits to employees who experience injury or disease whilst on the job, and, in turn, the employer cannot be sued by an employee for negligence.
If a dispute were to occur, an arbitrator with the Illinois Workers’ Compensation Commission would work with both parties in an unbiased manner in an attempt to reach a settlement out of court. If a settlement cannot be agreed upon, the case would then proceed to the judicial system. It could potentially reach the Illinois Supreme Court in extreme cases.
For businesses that are required to provide workers compensation insurance, all employees are entitled to such benefits. Compensation is not based on the type of job performed; however, some businesses are considered a lower risk than others and they will have lower premiums as a result.
According to a 2016 Oregon Workers’ Compensation Premium Rate Ranking study, Illinois is one of the most expensive states in the country for workers’ comp insurance. And, it is the most expensive in the Midwest. Also, unlike some other states, the taxpayers actually pay the cost of workers’ comp for public construction projects and government employees.
However, if you are not an employer of one of such employees, you will have to pay the expenses. As an average, in Illinois, employers have to pay $2.23 per $100 of employees’ payrolls. As previously mentioned, these premiums will vary based on industry and type of business.
If you are willing to be proactive, you can reduce your premiums regardless of your industry. Many insurers will reduce premiums for businesses that implement various programs. Such incentives include to participate in drug-free workplace programs, make safety a priority with training initiatives and establish a return-to-work program for employees returning from a workplace injury.
Where to Buy
Illinois allows employers two options for comp insurance. You can either purchase workers compensation insurance through an approved commercial insurance company, or you can also apply to become a self-insured organization.
If you choose to self-insure, you must apply for approval through the IWCC. Only private employers are allowed to apply for self-insurance. One of the biggest hurdles to become approved is that you must be able to prove that your organization has the financial means to pay any workplace injury claim in a timely manner. Several additional requirements exist, as well.
Most businesses choose to obtain commercial insurance. Be sure to speak with your insurance provider about the ways in which you can reduce costs. Ask them which programs can be implemented to decrease your premiums and if you qualify for any additional credits.
Potential Issues Without Comp Insurance
One of the benefits of having workers’ compensation is that you are equally as protected through the Illinois Workers’ Compensation Commission as employees. Unfortunately, just as accidents happen, fraudulent claims occur. As long as you have comp insurance, the IWCC can protect you from such claims if they were to occur.
Penalties are another potential consequence. In some cases, it has been stated to be $500 a day plus a minimum fine of $10,000. In addition to these penalties, the IWCC could order a business to stop operations altogether until they become compliant with workers’ comp laws. And, corporate officers could potentially be held liable if found non-compliant. You can only imagine the additional financial damage these severe actions would cause your business.
Do not forget to keep detailed records of all incidents. You will need such records to present to both your insurance and the IWCC if there were to be a dispute in the future. These records could also save you thousands of dollars. Also, in accordance with Illinois law, you must publicly post notice of the employees’ rights to workers’ compensation with your employment.
It is also important to note that if you have employees that travel out of state or that are located in another state, you must have proper coverage in each state from which they work. And, be sure you track injuries to determine if any trends emerge. If you notice a trend, take swift action to resolve the issue. In fact, be sure to carefully examine procedures after any incident to determine whether or not improvements can be made.
If you have any additional questions, contact or visit the website of the Illinois Workers’ Compensation Commission. Workers’ compensation insurance may be legally required, however it can also improve employee relations and company morale.