What If My Employer Doesn’t Have Workers’ Comp Insurance?

Insurance Claims

There are many reasons why an employer may refuse to pay out workers’ compensation benefits for a work injury, some of which are legitimate. However, failing to carry workers’ compensation insurance is against Illinois law except in a few rare cases.

In this article, we’ll look at what could happen if your employer doesn’t have workers’ comp insurance.

Legal Requirement to Carry Workers’ Comp Insurance

In Illinois, nearly all employers are required to carry insurance in order to cover work injuries. This is in exchange for protection against lawsuits from injured employees. Typically, you cannot sue your employer if you are injured on the job. Instead, you are entitled to compensation to cover your medical expenses, lost wages, and long-term disability.

When it comes to providing workers’ compensation coverage, employers have two options. They can buy insurance from a provider, or they can self-insure. The majority of employers in Illinois choose the first option.

Exceptions to the Rule

While most employers in Illinois must ensure their employees, there are some individuals who are exempt. These include:

  • Sole proprietors with no employees
  • Members of an LLC
  • Business partners
  • Corporate officers
  • Farmers with less than 400 hours of agricultural labor per quarter (excluding their immediate family members)

Outside of these exemptions, employees must be covered.

Penalties for Failing to Carry Insurance in Illinois

Failing to have insurance carries serious penalties for employers, including the following items.


The minimum fine is $10,000, but it’s calculated at $500 per day of noncompliance. Over time, these fines can reach massive amounts.

Criminal Charges

Corporate officers who negligently fail to obtain insurance can be charged with a Class A misdemeanor. It’s a felony if they knowingly didn’t get insurance (this is beyond simple negligence—they did it on purpose).

Cease Operations

On top of all that, the Illinois Workers’ Compensation Commission (IWCC) can issue a work-stop order to employers that fail to carry insurance. This means they must cease operations until they offer proof of insurance.

Civil Liability

Finally, employers who don’t cover their employees with workers’ compensation insurance are open to civil liability. This means you can sue your employer, potentially gaining more in the form of personal injury damages than you’d get through workers’ comp. However, it does require you to establish fault on the part of your employer for causing your injury. Otherwise, you don’t have a case.

Getting Compensated for Work Injuries

Given that your employer loses their protections under the Illinois Workers’ Compensation Act if they don’t carry insurance, you may be able to file a personal injury lawsuit against them. However, this is dependent upon them having caused your injury in some way due to negligence on their part.

In some rare cases, your employer may be exempt, in which case there is little you can do. Fortunately for Illinois workers, this is usually not the case.

If your employer doesn’t have insurance to cover work injuries, they likely won’t make that public knowledge. It will take some investigating, and it usually won’t come up unless you challenge them on a refusal to pay for a work injury. To do that, you’ll need a workers’ compensation attorney. If you find yourself in this situation, contact a lawyer immediately.

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