Illinois business insurance

As with most every other state, Illinois requires small business owners to have two types of insurance coverage. However, other types of business insurance are highly recommended to help you focus on growing your business. This guide explains what you need to know to protect your business.

Chicago bean

If you’re like the other 1.2 million small businesses owners in Illinois, you’ve probably got your hands full juggling a dozen different concerns on a daily basis1 Owning and operating a business carries inherent risks. For instance, employees getting injured on the job is just one of the many hurdles you may face. But that’s not all. You also have to worry about interacting with third-parties, cyberattacks, and a host of other potential issues.

This is why you need insurance—the right kind.

But what types of coverage are required in the “Prairie State,” and which ones should you strongly consider?

As with most every other state in the country, Illinois requires small business owners to have two types of insurance coverage:

  1. Workers’ compensation insurance
  2. Auto liability insurance

Illinois workers’ compensation insurance

Do you have any employees? If so, Illinois state law mandates that employers provide their workers with workers’ comp insurance coverage. It’s estimated that at least 91% of Illinois employees are covered by the state law.2

In 2018, Illinois employers reported more than 110,000 nonfatal workplace injuries and illnesses.3 A workers’ compensation insurance policy could help protect your business from the potential financial damages caused by a workplace incident, including:

  • Medical bills
  • Continued care, rehabilitation, and retraining
  • Disability
  • Lost wages
  • Funeral expenses

Failure to obtain workers’ comp could result in stiff penalties and fines. Per the Illinois government, “An 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.”4

Auto liability insurance

To drive a vehicle, you need auto liability insurance, but what about if you drive your personal car for work, are you covered? Unfortunately, there’s no one-size-fits-all answer as it depends on a few factors, including:

  • Who owns the vehicle (i.e., you or your business)?
  • How the vehicle is used, specifically does it transport people for a fee or deliver products on a regular basis?

As a general rule, if your vehicle is owned by your business, you need separate commercial auto coverage. When you own your vehicle personally but use it for your business, things can get a little murky. Let’s look at some examples.

George is one of Chicago’s top personal trainers traveling all over the Windy City to help clients tone and sculpt. George uses his own small truck to drive to each studio or client’s home. As he only drives himself, his personal auto policy should provide appropriate coverage.

Emma is a wedding florist whose business (and reputation) depend on creating and delivering her arrangements to customers on time. Because of using the vehicle for customer deliveries, Emma likely needs separate commercial auto coverage.

Not sure what exactly you need? Even if you are, we always recommend talking with your auto insurance provider to make sure you’re fully protected.

Recommended business insurance

While you may only be legally required to have auto liability insurance and workers’ comp insurance, there are still many other risks that small businesses face in their day-to-day operations.

To that end, there are at least three types of insurance you should strongly consider adding:

  • General liability insurance
  • Professional liability insurance
  • Inland marine insurance (aka equipment insurance)
  • Cyber insurance

General liability insurance in Illinois

General liability insurance can help pay for damages incurred by a non-employee third-party. It can help cover the investigation, defense, and settlement for third-party claims stemming from:

  • Bodily injury
  • Property damage
  • Personal and advertising injury

For instance, if you work as a handyman, you spend a lot of time in clients’ homes. Should your client (the third party) slip, fall, and injure themselves on your equipment, you could be held liable. In this case, general liability insurance could help protect you.

That said, general liability doesn’t cover loss or damage to property you own. For your tools, gear, and equipment you need inland marine insurance or as we call it, Business Equipment Protection (BEP). We believe in making business insurance simple and easy. That’s why our monthly general liability plans can be packaged with Business Equipment Protection insurance. Protect your equipment whenever you’re using it!

Professional liability insurance in Illinois

Professional liability—sometimes referred to as errors and omissions (E&O)— helps cover a client’s financial losses stemming from your providing the wrong advice or your failure to provide professional services properly. This type of insurance provides the investigation, defense, and payment to settle these types of claims.

For instance, if you’re a marketing professional, your clients expect you to help promote and grow their business. But what would happen if one of your ad campaigns doesn’t work or worst case, the client claims resulted in financial losses? Although you may have done nothing wrong, the client could claim your mistake or negligence resulted in the loss. This is where professional liability coverage comes in. At a minimum, it will provide a defense even if you are not responsible for any damages.

Cyber insurance

These days, building an online presence is a critical part of running a successful small business. But when you operate online, you expose your business to cyber risk. In 2019, Illinois had the sixth highest losses5 ($107,150,000) resulting from cyber crime in the country.

Should an attacker successfully breach your cyber security perimeter, it could jeopardize both your reputation and operations. One of the best ways to mitigate this threat is by purchasing cyber insurance. It can help cover:

First-party costs

  • Notifying clients of breach
  • PR and marketing
  • Repairing damaged software/hardware
  • Business interruptions
  • Ransomware costs
  • Client credit monitoring
  • Regulatory fines

Third-party costs

  • Privacy lawsuits
  • Media liability claims

These policies often provide the investigation and defense of third party liability claims.

As the world continues to become more integrated and interconnected online, it’s vital that you protect your business from virtual threats.

How to protect your Illinois business

Whether you work in big city Chicago or small town Galina, you assume a whole lot of risk as a small business owner. It’s critical that you take the proper steps to protect your business.

In Illinois, you’re required to have auto and workers’ comp insurance. But don’t stop there! At a minimum, consider general liability insurance and professional liability insurance to protect yourself from multiple kinds of risk.

So, where do you go to get the insurance coverage your business needs?

You’re already here. With Thimble, you can get affordable, on-demand insurance in under a minute. Flexible policies go by the hour, day, or month.

Getting covered is fast and easy. Simply download the Thimble mobile app or click “Get a Quote.” Enter a few brief details about your needs and in less than 60 seconds you can have your policy and Certificates of Insurance (COI) in your inbox.

Hedging your risks is just smart business. For that, we’re here to help.

Sources:

  1. Small Business Advocacy Council. Illinois Small Business – By the Numbers
  2. Illinois Gov. Workers’ Compensation Insurance: It’s the LAW. 
  3.  U.S. Bureau of Labor Statistics. Employer-Reported Workplace Injuries and Illnesses in Illinois — 2018
  4. Illinois Gov. Workers’ Compensation Insurance: It’s the LAW
  5. Statista. Loss Through Cyber Crime in the U.S. 2019

Our editorial content is intended for informational purposes only and is not written by a licensed insurance agent. Terms and conditions for rate and coverage may vary by class of business and state.

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