Illinois Business Insurance Guide for Small Business Owners

As a small business owner in Illinois, you're likely no stranger to the importance of protecting your business with the right insurance coverage. Illinois requires businesses to carry liability insurance to cover damages or injuries to third parties.

The Illinois Department of Insurance recommends that small business owners consider liability insurance, property insurance, and workers' compensation insurance to meet their state's minimum requirements.

In Illinois, the minimum liability insurance coverage required is $20,000 for bodily injury or death, $15,000 for property damage, and $5,000 for personal injury.

If you're planning to open a restaurant in Illinois, you'll need to carry workers' compensation insurance at minimum. This type of insurance is required by law to protect your employees in case of work-related injuries.

Most restaurants also need general liability insurance to protect against customer slip-and-fall incidents. This can be a costly mistake if you don't have the right insurance in place.

In Illinois, a business owner's policy (BOP) is a great option for many small businesses, especially those in low-risk industries. It simplifies your insurance needs by bundling essential coverages into one affordable policy.

A typical business insurance package in Illinois will include commercial general liability, commercial property, business interruption coverage, commercial auto insurance, and workers' compensation insurance, at a minimum.

These essential coverages can be bundled into one policy, such as a Business Owner's Policy (BOP), which simplifies your insurance needs and provides affordable protection for small businesses in low-risk industries.

Consider your business operations and unique risks when selecting additional policies, such as professional liability, inland marine, or cyber liability insurance.

Here are some common industries that may require specialized insurance coverage:

By understanding your business insurance options and selecting the right coverage, you can protect your business from various risks and ensure continuity in the event of an unexpected event.

Business insurance premiums in Illinois can vary widely, depending on factors like industry, size, location, and coverage limits. On average, small businesses in Illinois pay around $1,200 per year for a basic BOP, but premiums can range from a few hundred to several thousand dollars per year.

In some Illinois cities, a business liability insurance policy can start at a yearly rate of $350, with convenient monthly payment options. Business insurance for barber shops, offices, hair salons, and other low-risk main street businesses typically cost about $50 per month.

The average cost of business insurance in Illinois varies across businesses and industries, depending on the size of your business, the nature of your business or industry, the number of employees you have, and the location of your business. Some companies might be more susceptible to property losses from natural disasters, severe weather, or crime because of their location.

An independent business insurance agent can help you understand all of the risks you face and get quotes for affordable business insurance in Illinois. They'll consider factors like the geographic region within Illinois, yearly revenue and payroll, claims history, risk management and training, business experience, and prior insurance history.

Here are some estimated monthly premiums for small businesses in Illinois, based on sample quotes from various brokers and carriers:

Failing to carry workers' compensation can result in severe penalties, including fines of up to $500 per day of non-compliance.

Choosing the right insurance for your business in Illinois can be overwhelming, but understanding the types of insurance available can make all the difference.

Commercial general liability (CGL) insurance is a must-have for any business, as it protects you from lawsuits related to bodily injury and property damage claims.

A business owner's policy (BOP) is a great option for many Illinois small businesses, especially those in low-risk industries, as it simplifies your insurance needs by bundling essential coverages like general liability and commercial property into one affordable policy.

If you own a physical business space, you'll want to consider commercial property insurance, which covers damage to your building and its contents.

Other types of insurance to consider include professional liability, which covers claims of financial harm or loss as a result of advice or failure to perform a contracted service made by a third party.

Here are some common types of business insurance in Illinois:

If you're in a high-risk industry, such as the restaurant business, you may want to consider additional types of insurance, such as general liability and commercial property insurance.

Accidents can happen to even the most careful and well-prepared companies.

Filing an insurance claim is never a pleasant experience, but having the right guidance can make all the difference.

The Allen Thomas Group will guide you through the claims process from start to finish, advocating for your interests and working to get you the best possible outcome.

They'll also help you review and update your coverage regularly to ensure you're always protected.

As your business grows and scales, your insurance needs may change, and The Allen Thomas Group will work with you to identify any gaps in coverage and make recommendations for adjusting your policies.

A severe storm damaged a manufacturer's roof and caused water damage to their inventory, but with The Allen Thomas Group's help, they were able to secure a fair settlement that allowed the business to repair the damage and replace the lost inventory.

A BOP is a great option for many Illinois small businesses, especially those in low-risk industries. It simplifies your insurance needs by bundling essential coverages like general liability and commercial property into one affordable policy.

Our Illinois Commercial Insurance Agents craft custom policies to protect a wide range of industries, including business and professional services, construction and contracting, and education.

Here are some specific industries that can benefit from custom insurance policies:

Custom policies are a crucial aspect of insurance for specific industries. The Allen Thomas Group crafts custom policies to protect various sectors, including business and professional services, construction and contracting, education, energy, and more.

Their team will guide you through the claims process, advocating for your interests and working to get you the best possible outcome. They'll also help you review and update your coverage regularly to ensure you're always protected.

The Allen Thomas Group's expertise in custom policies is evident in their ability to identify gaps in coverage and make recommendations for adjusting policies as businesses grow and scale.

Their experience in handling claims is impressive, as seen in the real-world example of a manufacturer whose roof was damaged in a severe storm, and they assisted with filing the claim, coordinating with the insurance adjuster, and securing a fair settlement.

Here's a list of industries that The Allen Thomas Group offers custom policies for:

Their extensive list of industries covered ensures that you'll find a policy that suits your specific needs.

Opening a restaurant in Illinois requires careful planning, and that includes getting the right business insurance. At minimum, Illinois requires restaurants to carry workers' compensation insurance.

To protect against customer slip-and-fall incidents, most restaurants also need general liability insurance. This type of insurance can help cover damage to your restaurant and equipment.

In addition to these requirements, consider the types of business insurance that are commonly requested by businesses. Commercial general liability, property, and commercial umbrella insurance are just a few examples.

Commercial general liability insurance can provide coverage for bodily injury, personal injury, advertising injury, legal defense, and judgments, as well as property damage. If you own the commercial property your restaurant operates from, you'll also need property insurance to cover your business' contents, including equipment, furniture, and inventory stock.

In Illinois, workers' compensation insurance is a must-have for businesses with one employee or more. This insurance covers medical bills and lost wages for employees who get hurt or sick on the job.

The state of Illinois requires employers to offer workers' compensation insurance to their employees. This insurance helps pay for medical expenses, lost wages, and death benefits for employees who are injured or become ill because of their work.

There are some exceptions to this rule, but they're few and far between. Sole proprietors, limited liability company (LLC) members, corporate officers, and business partners may be exempt, but only if their industry isn't hazardous.

In 2022, there were over 102,000 workplace incident reports for nonfatal injuries in Illinois. This highlights the importance of carrying workers' comp, even if it's not required by law.

If you don't carry workers' compensation insurance, you could face a fine of at least $500 per day. The minimum fine is $10,000, and if you don't pay up, your corporate officers could be held personally liable.

Here's a quick rundown of the key points:

Business insurance costs in Illinois vary widely depending on factors like industry, size, location, and coverage limits. On average, small businesses in Illinois pay around $1,200 per year for a basic BOP (Business Owner’s Policy).

Premiums can range from a few hundred to several thousand dollars per year, making it essential to shop around for the best rates. Failing to carry workers’ compensation can result in severe penalties, including fines of up to $500 per day of non-compliance.

In some Illinois cities, a business liability insurance policy can start at a yearly rate of $350, with convenient monthly payment options. Business insurance for barber shops, offices, hair salons, and other low-risk main street businesses typically cost about $50 per month.

Other types of businesses, such as restaurants, auto dealerships, auto service shops, contractors, and similar, can expect Illinois business insurance to cost $100 per month. The average cost of business insurance in Illinois varies across businesses and industries.

Depending on the level of risk you face, you’ll pay more or less than average for your insurance coverage. Some companies might be more susceptible to property losses from natural disasters, severe weather, or crime because of their location.

Here are some estimated monthly premiums for different types of businesses in Illinois:

Insurance costs seem to be rising nationally, and it's essential to consider factors like geographic region, yearly revenue and payroll, claims history, risk management and training, business experience, and prior insurance history when determining premiums.

An insurance provider is the company that underwrites and services your policy. They can be reached directly by consumers or through agents or brokers.

An agent works for the insurance company and helps connect the carrier with prospective policyholders. There are two types of agents: captive agents who only sell insurance for one company, and independent agents who work with multiple companies.

Some insurance providers distribute their products through agents or brokers, while others work directly with consumers and generate quotes online. For example, State Farm is a provider with many captive agents.

Insurance carriers like Travelers, The Hartford, Liberty Mutual, and Chubb work with agents to bring you comprehensive coverage at competitive rates. These carriers can be reached directly or through an agent.

Here's a comparison of insurance providers and agents:

In summary, insurance providers and agents work together to bring you the insurance coverage you need.

In Illinois, business insurance is regulated by the Illinois Department of Insurance, which sets minimum requirements for insurance policies.

The Illinois Insurance Code requires all business insurance policies to include a notice of cancellation, which must be provided to the policyholder at least 10 days before the effective date of cancellation.

Businesses in Illinois are also required to maintain a minimum level of liability insurance, which varies depending on the type of business and its specific operations.

The Biometric Privacy Act, also known as BIPA, is a law that gives individuals in Illinois protection for their biometric information, such as retina and iris scans, voice prints, and facial geometry.

In 2008, Illinois was the first state to pass BIPA, and it's currently the only state that allows private action for BIPA violations.

The courts in Illinois have been unfavorable to businesses and insurers in BIPA rulings, with a notable example being the 2022 ruling against the BNSF Railway, resulting in a $228 million judgment in favor of the plaintiffs.

BIPA has been expanded by the Illinois Supreme Court, increasing the statute of limitation on BIPA claims from one year to five years.

Small business insurance in Illinois may currently have coverage for BIPA claims under the personal injury section of a commercial general liability policy or in employment practices liability insurance.

If your business doesn't carry workers' comp in Illinois, you can be fined $500 for every day it's not covered.

The minimum fine is $10,000, which is a significant amount for any business to pay. This fine is in addition to the cost of litigation and other expenses you may incur.

If your business can't pay the fine, its corporate officers can be held personally liable.

In Illinois, the fine for not carrying workers' comp is a serious consequence of not following the law.