State insurance guide
Illinois Business Insurance Guide 2026
An Illinois employer with even one employee, including a part-time employee, must obtain workers' compensation insurance, with rare exceptions set out in Section 3 of the Act. Auto liability minimums and paid leave rules follow, each with its official source.
Explore Illinois requirements
Open the state requirements checklistAn Illinois employer with even one employee, including a part-time employee, must obtain workers' compensation insurance, with rare exceptions set out in Section 3 of the Act (Illinois Workers' Compensation Commission: Insurance (About) and frequently asked insurance questions). The minimum auto liability limits are $25,000 per person and $50,000 per accident for bodily injury and $20,000 for property damage (625 ILCS 5/7-203 (Illinois General Assembly)). Illinois has no state paid family leave or disability insurance program, according to NCSL's table.
Official sources checked October 3, 2026. This guide is general information, so confirm your own case with the responsible agency.
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Workers' compensation
Who must carry it: 1 or more employees, including part-time (Illinois Workers' Compensation Commission: Insurance (About) and frequently asked insurance questions).
If you have one employee, even a part-time employee, you must obtain workers' compensation insurance.
Exemptions and exclusions
Sole proprietors, business partners, corporate officers and LLC members may exempt themselves. Family members must be insured unless they are corporate officers or work for an agricultural enterprise that used less than 400 working days of labor per quarter in the preceding year, not counting the employer's resident immediate family (Illinois Workers' Compensation Commission: Insurance (About) and frequently asked insurance questions).
The agency to ask is the Illinois Workers' Compensation Commission. The workers' compensation guide covers what a policy pays, and the workers' comp calculator works through payroll, rate and modifier figures you enter.
Auto liability minimums
Illinois's minimum auto liability limits:
- Bodily injury liability: $25,000 per person and $50,000 per accident
- Property damage liability: $20,000 per accident
- In force: for policies issued or renewed on or after January 1, 2015
- Source: 625 ILCS 5/7-203 (Illinois General Assembly)
Commercial and for-hire vehicles can face different or higher federal or state requirements, as our commercial auto guide explains.
Paid leave and disability insurance
According to NCSL's table, last updated November 7, 2025 (NCSL: state family and medical leave laws), cross-checked on October 3, 2026 with the U.S. Department of Labor Women's Bureau, Illinois has no state paid family and medical leave insurance program and no state temporary disability insurance program.
Laws can change faster than compilations: Virginia enacted a program in 2026 (Code of Virginia § 60.2-801). Ask the state agency that handles labor and workforce matters before planning payroll for a later year.
Other requirements to check
Insurance or bond conditions can also come from licensing boards, landlords and clients, for example as general liability limits or certificate wording. Log each one in the certificate of insurance checklist, and use the requirements-by-state guide for work outside Illinois.
Where to verify
- Workers' compensation: Illinois Workers' Compensation Commission
- Auto liability minimums: 625 ILCS 5/7-203 (Illinois General Assembly)
- Paid leave and disability insurance: NCSL state family and medical leave laws and the U.S. Department of Labor Women's Bureau
Our state requirements checklist turns your employee count and vehicle use into questions for those offices. To ask PolicyBenchmark for a follow-up about your Illinois business, request coverage help.
Frequently asked questions
Does an Illinois business with one employee need workers' compensation?
Generally, yes: Illinois applies the requirement from the first employee (Illinois Workers' Compensation Commission: Insurance (About) and frequently asked insurance questions). Exemptions listed above can still apply to particular workers or owners; the agency to ask is the Illinois Workers' Compensation Commission.
Are Illinois's auto minimums enough for business vehicles?
Illinois's minimums are $25,000 per person and $50,000 per accident for bodily injury and $20,000 for property damage (625 ILCS 5/7-203 (Illinois General Assembly)). They are the lowest limits the law allows. Commercial and for-hire vehicles can face different or higher federal or state requirements, and leases or clients can ask for more.
Does Illinois require employers to pay into a paid leave program?
No, according to NCSL's table, last updated November 7, 2025 (NCSL): Illinois has neither a state paid family and medical leave program nor a temporary disability insurance program. Confirm before planning a future payroll year.
About this article
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This content is for informational purposes only and does not constitute insurance advice. Always consult with a licensed insurance professional before making coverage decisions.