Illinois Workers Compensation Insurance: Subcontractors

At least once a week I have an uninsured subcontractor issue. Some common misconceptions:


  • I’ll have them sign a waiver.  Unfortunately, it's not that easy.
  • Subcontractor has no employees and not required to buy work comp.  Not an option for you.   


The Illinois Workers Compensation Act reads - in addition to an employee the employer is liable to pay compensation to “any contractor or subcontractor unless such contractor or sub-contractor has insurance, in any company or association authorized under the laws of this State” blah blah blah.   See definition of an Employer 1(a)3.


The Basic Manual published by the National Council on Compensation Insurance (NCCI)  reads – “in those states where workers compensation laws provide that a contractor is responsible for the payment of compensation benefits to employees of its uninsured subcontractors, the contractor must furnish satisfactory evidence that the subcontractor has workers compensation insurance in force covering the work performed for the contractor.” 


Basically, get your certificates in order to avoid being charged at time of a workers compensation premium audit!


If you are an employer in Illinois or the Chicago area and have more questions on this issue… feel free to contact me.


Dan Zeiler


Comments for Illinois Workers Compensation Insurance: Subcontractors

Name: Bill
Time: Monday, February 28, 2011

I am a sub contractor working for a sub contractor working for sears installing appliances in IL, Do I need to buy workmans comp for myself by law ? I have no employes

Name: Lisa
Time: Tuesday, November 13, 2012

We use a job agency for our employees. The job agencys technically employees the employee but we pay service fees for them to work for us. They have work compensation on the employee and our name is listed when I send the certification to our customers. It is necessary for the customer to have their name on the certificate like general libability certificates? We are the employer so if our name is on the certification shouldn't that be ok. We are in IL.

Name: Dan Zeiler
Time: Tuesday, November 13, 2012

Hi Lisa, It is not necessary for your customers name to be listed on the certificate unless they specifically require a "waiver of subrogation" or other work comp requirement. BUT, make sure that your name is listed not only as a "Certificate Holder" on your staffing agencies certificate but you should also be listed as an "Alternate Employer" in the description of operations section of the certificate.

Here's a blog post on the topic:

Name: Nancy
Time: Thursday, December 4, 2014

Hi Dan, I work for a consulting firm in IL. We use sub-contracted consultants as well as hired full time consultants. I was recently audited and am being charged for the worker's comp of a sub-contractor who I have checked with that does not have a policy on himself. His company is an LLC and he is the only employee. Do we have to pay for his worker's comp coverage?

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