Starting your own business in Illinois is exciting. You have the opportunity to provide a service or product that you believe in, make some money, be your own boss, and provide opportunities to the people you will hire. However, if you are hiring people, then you must treat them like the assets they are,
In Illinois, the vast majority of businesses are required to have workers’ compensation coverage for their employees. The main reason is that your employees deserve to know that if they get seriously injured while working and trying to make your business a success, they will be protected. Nobody should find themselves in financial hardship because of work they do on behalf of someone else.
Risk to Not Having Workers’ Compensation For An Employer
As a small business, you might think that you should be doing everything you can to cut costs. While this is true in most circumstances, it isn’t necessarily so when it comes to insurance. Workers’ compensation isn’t the place in your budget where you want to cut corners. If you do not properly protect employees, you could find your business at significant risk.
For instance, if a worker gets injured and is unable to work, they will lose out on wages as well as have to deal with healing and rehabilitation. If you have not done your legal duty to protect them, then you will be in peril of being sued. If you are sued, you will end up having to pay legal and court costs along with any damages the complainant is awarded. On top of that, you may have to pay extra for pain and suffering, as well as compensation to the dependants and spouse if the employee has passed away.
It’s also illegal if you do not have workers’ compensation and are required to provide it. You could face fines to start that get progressively worse as time goes on. They start at $500 a day, and can get up as high as $10,000. That’s a hefty price to pay just to avoid paying some insurance premiums every year. Your coverage will keep you out of liability peril, and out of legal peril.
Benefits to the Employee
The main reason to have worker’s compensation, even if it weren’t mandatory, is to protect your employees. Workers are the lifeblood of our economy, and we all must do what we can to keep our workforce robust. Put yourself in the shoes of someone who gets hurt while working for you. They are in pain, they cannot work to make money, and they are in a hospital bed. They have bills to pay for their hospital, plus their mortgage or rent, and putting food on the table for their family.
They must face all of this while trying to hear and recover and get back to work. This can be incredibly stressful, and many cannot shake that stress to properly work on themselves and focus on healing. If an employee dies while on the job, their spouse and dependents deserve to have compensation for the devastating loss of their loved one, along with the fact that they will not be able to earn money any more.
There are several exceptions to the workers’ compensation law. For instance, sole proprietors do not have to purchase this coverage for themselves. Some agricultural businesses that only use up to 400 days of work per year are not required to have it. If you run a business and the staff is made up of your own family, then you don’t need to provide them with workers’ compensation. Business partners and corporate officers also do not have to have Illinois workers’ compensation coverage.
However, there are some exceptions to the exceptions. If you are a private contractor, but work in a designated dangerous industry, such as construction, you must have workers’ compensation. Trucking is also a hazardous industry, where truck drivers must have workers’ compensation.
Obtaining Workers Compensation Insurance in Illinois
There are two ways to get Illinois workers’ compensation insurance through the private marketplace. You can purchase it with an insurance company or broker and try to find the best rates for you, for starters. If your company is large enough, you may also qualify for self-insurance. To do this, you need to be approved by the Illinois Workers’ Compensation Commission.
Illinois does tend to have a high cost when it comes to workers’ compensation premiums. On average, you can expect to pay a little under $2.00 for every $100 that you have in payroll. This puts Illinois firmly in the top half of states for most expensive. Here are some key points to remember when purchasing this coverage.
For one, you must purchase it for your entire payroll so that everyone is covered. You cannot pick and choose who gets it and who doesn’t. You also must clearly post that your employees have workers’ comp coverage. Place a notice in the break room or another high-traffic area of your building. You should also document any workplace incidents, such as injuries, illnesses, trips to the hospital, and anything that costs over 3 days of missed working time. This is required under Illinois law as well. The key is, you must have the coverage, and you must make sure that your employees know it. That way, you can not just protect yourself and them, but you will also help your staff feel more safe and secure.
A successful business is one that minimizes its investments and pulls in the most revenue possible. That’s the whole concept behind a return on investment. Insurance is an investment as well, even though you may never need to use it. When it comes to workers’ compensation, you owe it to your business, your employees, and your staff to have adequate protection in case the unthinkable were to happen. Not only that, but in Illinois, it is the law, so if you want to be a legitimate business, you must have workers’ compensation coverage.
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