Worker's Compensation Insurance

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What Is Workers Compensation Insurance?

Workers compensation is mandatory in most states for employers to be licensed and to provide service. Workers Comp insurance serves two basic purposes:

  • Protect employees who have been injured on the job and
  • Protect employers from litigation

Buying Workers Compensation insurance pays for an injured employee’s medical bills and lost wages. An employee will only be paid a portion of lost wages, typically about two-thirds of his or her salary. Most employees who become ill or are injured because of an accident on the job have an absolute right to medical care for the injury and the right to receive compensation from the employer for these costs.

For a quick, no obligation quote, please call 847-441-9222.
Or, you can e-mail us directly at

Workers Comp Insurance and NCCI States

About two-thirds of all states in the U.S. are NCCI states when considering workers comp insurance. The NCCI (National Council on Compensation Insurance) is a non-profit organization that provides services to insurers and insurance agents, as well as to state governments and regulatory authorities.

The NCCI analyzes trends within the insurance industry, gathers data and other information from insurers, and provides various recommendations on rates and costs associated with losses. States that are considered NCCI states include Illinois, Iowa and Missouri, while Wisconsin and Indiana are both considered to be independent states.

Please visit the National Council on Compensation Insurance for more information, along with a reference map of states which utilize the NCCI as the licensed rating and statistical organization.

How Does Workers Compensation Insurance Protect Your Business?

As stated earlier, most states require companies to purchase workers compensation insurance (also known as workman’s compensation) for their employees. A few states have “pools” of insurance that are available for businesses to purchase, but in the majority of states, companies must obtain private workman’s compensation coverage from a private carrier.

Since workers comp insurance is mandated by law, small-business owners consider it one more overhead expense that provides little benefit to the business. However, business owners should instead consider workers compensation insurance as an affordable benefit that protects both themselves and their employees.

There are several optional components of a workers compensation insurance policy. These can have an impact on the cost and value of the coverage provided for you and your employees:

  • In the employers' liability section, or "part two" coverage, your legal expenses would be covered if an employee makes a false or inappropriate claim of work-related illnesses or injuries. This section is almost always included in workman’s compensation insurance, but you can choose the amount of liability coverage in your policy.
  • Coverage for employees who are injured in states outside those where your business normally operates.
  • Coverage for various types of injuries and illnesses. The mandated part of this section depends on the state where your business is located, but you need to be aware of what is and is not covered.
  • Coverage for funeral expenses and financial support to dependents.
  • Reimbursement percentages for lost wages.

Without insurance, an employee can file a lawsuit against the employer to reclaim these damages. In most cases, employees covered by Workers Compensation insurance forfeit their right to file a lawsuit against the employer. Being covered by this insurance system ensures that the employee gets the medical attention that they need and that the employer is financially protected.

Other Business Insurance Services

Employee Health Plans | Product Liability

For a quick, no obligation quote, please call 847-441-9222.
Or, you can e-mail us directly at

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