Workers compensation insurance provides benefits to employees for work-related injuries. With workers compensation insurance, employees are not able to sue their employer should they suffer a job-related injury. Likewise, employers agree to provide benefits should an employee suffer a job-related injury.
Workers compensation insurance includes medical care and a percentage of wages when the employee is unable to work. Workers compensation also provides benefits for the employee's dependents if the employee dies while performing work-related tasks.
The type of business affects the insurance premiums that you will pay. For example, a construction company will pay higher premiums than a law office since construction is a more dangerous business.
Workers compensation coverage is required by law in Illinois when you have employees. Coverage is also required for 1099 employees unless they can provide proof of having their own policy. This is a separate policy. Officers of corporation and/or managing owner of an LLC can exclude themselves from coverage.