If your contracting business has any employees, you need workers' compensation in Illinois no matter what license you hold, because the requirement comes from the Workers' Compensation Act, not from the license. Illinois has no single statewide general contractor license, so no state license forces you to buy insurance for general construction; cities and counties handle that, like the City of Chicago's general contractor license, so requirements vary by locality. Among the trades licensed statewide, roofing is the one that ties workers' comp directly to the license, making proof of coverage a condition of getting licensed.
Who this is for: Illinois builders and tradespeople sorting out licensing and the insurance their work actually requires.
The short version
- Illinois has no statewide general contractor license; cities and counties license general contractors, so rules vary by locality.
- Roofing contractors are licensed statewide by IDFPR and must show proof of workers' comp to get licensed.
- An out-of-state roofer needs a policy with an all-states endorsement or a clause covering Illinois accidents under Illinois law.
- Plumbers are licensed statewide by the Illinois Department of Public Health.
- Whatever the license, workers' comp is mandatory once you have any employee, and a general contractor can owe benefits for an uninsured sub (820 ILCS 305/1(a)(3)).
What Illinois actually licenses
Illinois does not issue a catch-all general-contractor license for all construction. General contractor, electrician, and HVAC licensing is handled at the city or county level, so a Chicago general contractor license and a suburb's rules can differ. Statewide trade licensing exists for only a couple of trades: roofing contractors are licensed by the Illinois Department of Financial and Professional Regulation, and plumbers are licensed by the Illinois Department of Public Health. None of the local general-contractor licenses create the workers' comp duty; that comes from the Workers' Compensation Act, and the roofing license is the notable one that requires proof of comp as a condition of licensure.
| Type of work | Statewide license? | Workers comp |
|---|---|---|
| General contracting | No, licensed by city or county | Required once you have any employee (820 ILCS 305) |
| Roofing | Yes, IDFPR roofing contractor license | Proof of coverage required to get the license |
| Plumbing | Yes, Illinois Department of Public Health | Required once you have any employee |
| Any contractor hiring subcontractors | Depends on the trade and locality | Also exposed for an uninsured sub (820 ILCS 305/1(a)(3)) |
Where the comp requirement really comes from
Even where a local license does not mention insurance, workers' comp still reaches you the moment you have an employee, and contractors carry a second exposure that catches people off guard: under 820 ILCS 305/1(a)(3), if you hire a subcontractor who has no coverage, you can be liable to pay benefits to that sub's injured workers, and can then try to recover from the sub. That is why collecting a current proof of coverage from every sub, before they start, protects you. For roofers, the statewide license makes it explicit: you must provide a certificate of workers' comp to get licensed, and an out-of-state roofer needs an all-states endorsement or a clause covering Illinois accidents under Illinois law.
A Chicago example
Illustrative, not a quote. A Chicago electrician holds a city license and runs the business with two employees. There is no statewide general-contractor license involved, but because the business has employees, Illinois requires workers' comp under the Act, and the general contractors he works for require proof of it before he sets foot on site. When he subcontracts a low-voltage job to another shop, he collects that shop's proof of coverage first, so an uninsured sub's injury cannot become his responsibility under 820 ILCS 305/1(a)(3). We handle his employee coverage and keep his certificates ready. See our workers comp for electricians page.
Real questions Illinois owners ask
Does Illinois have a statewide general contractor license?
No. Illinois licenses general contractors at the city or county level, like the City of Chicago license, so there is no single statewide general-contractor license and rules vary by locality.
Does an Illinois contractor license require workers comp?
It depends on the license. Local general-contractor licenses vary, but the statewide roofing license requires proof of workers' comp, and comp is mandatory anyway once you have any employee.
What does a roofer need for the state license?
Proof of coverage. A roofing contractor must show a certificate of workers' comp to get the IDFPR license, and an out-of-state roofer needs an all-states endorsement or a clause covering Illinois accidents.
Do I need workers comp for my construction business?
Once you have an employee, yes. Construction is covered by the same rule as any employer, so a policy is required from the first employee, and construction gets the state's heaviest enforcement.
Am I responsible for an uninsured subcontractor?
You can be. Under Illinois law, a contractor who hires an uninsured subcontractor can be liable to pay benefits to that sub's injured workers, so collect proof of coverage from every sub before they start.
Are electricians and HVAC contractors licensed by the state?
Usually at the local level. Electrician and HVAC licensing in Illinois is generally handled by the city or county, not statewide, so check the rules where you work.
Why Illinois owners choose Morrow
- We shop the right market for you. In Illinois you buy workers' comp on the open market from any private carrier licensed in the state, because Illinois has no state fund; if no carrier will take you, the Illinois Workers' Compensation Assigned Risk Plan (the assigned-risk plan) is the guaranteed fallback, so we can shop your rate freely and still keep a backstop for hard-to-place work.
- We catch pricing mistakes. Your price depends heavily on the category your work falls into for pricing (the class code). Put people in the wrong category and you overpay for years. We review your payroll and classifications before you buy.
- Proof of coverage, fast. Need a certificate (proof of coverage) for a general contractor or a landlord before Monday? We turn those around the same business day for most carriers.
- We help lower the score that drives your price. Insurers give you a score based on your past claims that raises or lowers your cost (the experience modification rate). We review it each year, flag errors, and connect you with return-to-work and safety resources that bring it down.
- Real people when a claim happens. When someone gets hurt, we stay involved through the life of the claim, not just at renewal.
Related Illinois guides
Every Illinois business is set up a little differently. These companion guides answer the same question for other situations, plus the national explainers behind the terms used here.
- Business insurance in Illinois (start here)
- Workers comp: the owner's overview
- I own an LLC: do I need workers comp?
- I'm a sole proprietor: do I need workers comp?
- I own a corporation (C-corp or S-corp): do I need it?
- We're a partnership: do we need workers comp?
- We're a nonprofit: do we need workers comp?
- My workers are 1099: do I still need it?
- Only part-time or seasonal staff: do I need it?
- I only employ family: do I need workers comp?
- Remote or out-of-state staff: do I need coverage?
- What happens if I don't carry workers comp?
- How much does workers comp cost?
- How do I get workers comp (even if turned down)?
- Workers compensation insurance, explained
- What workers comp costs (national guide)
- Do I need workers comp for 1099 contractors?
- What workers comp does not cover
- Illinois electrician workers comp
This guide is general information, not legal advice. Illinois rules and penalty amounts can change, so verify current requirements with the Illinois Workers' Compensation Commission (IWCC) or a licensed advisor before you rely on them. Last updated: July 2026.