If you are a true sole proprietor in Illinois with no employees, you are not required to carry workers' comp, because a sole proprietor is not an employee of the business and is left out of the Act unless they elect in (820 ILCS 305/1(b)). The moment you hire even one employee, full-time or part-time, coverage becomes mandatory for your staff (820 ILCS 305/3). So going solo keeps you outside the requirement, and hiring is what pulls you in.
Who this is for: Illinois sole proprietors, from a solo trade to one who is about to bring on help.
The short version
- A sole proprietor with no employees is not required to carry; you are out of the Act by default and may elect in.
- Hiring even one employee, part-time included, makes coverage mandatory for your staff.
- You can elect coverage on yourself by having the carrier add you to the policy.
- Many general contractors and clients still require proof of coverage before you can work, even solo.
- Going uninsured once you have staff can be a felony with daily penalties (820 ILCS 305/4).
Why a solo owner is not required to carry
Illinois law treats a sole proprietor as the business, not as an employee of it. The Act says sole proprietors may elect to be covered, which means they are outside it by default and choose to come in, and they must still cover any non-owner employees. So with no staff, whether to insure yourself is a business decision, not a legal one. The requirement appears the day you hire someone the state would treat as an employee. Until then you are not counted, and there is nothing to file to prove it.
| Your setup | Is comp required? | What to know |
|---|---|---|
| Solo, no employees | No | You are not an employee of your own business; you may elect coverage voluntarily |
| Hired help of any kind | Yes | Your employees must be covered from the first hire, part-time included |
| Solo, working under a general contractor | Not by the state | The state does not force it, but the GC or client usually requires proof of coverage |
When you might want a policy anyway
Even with no legal duty, two things push solo owners to buy. First, general contractors, property managers, and some clients will not let you on the job without proof of workers' comp, and if you have none they may charge the cost of covering you back to you. A policy written for an owner with no employees, sometimes called a ghost policy, exists mainly to satisfy that paperwork. Second, your own on-the-job injuries are not paid by anyone unless you elect coverage on yourself, so if your health coverage is thin, electing in can be worth it.
An Aurora example
Illustrative, not a quote. A solo cleaning contractor in Aurora has no employees, so Illinois does not require a policy. A property management company she wants to clean for will not add her to its buildings without proof of workers' comp. We set her up with a policy that satisfies the contract and, because she works alone with no health backup, we walk her through electing coverage on herself so a slip on a wet floor would be paid. See our workers comp for cleaning and janitorial page.
Real questions Illinois owners ask
Do I need workers comp as a sole proprietor in Illinois with no employees?
No. A sole proprietor with no employees is not an employee of the business and is not required to carry workers' comp. You may elect coverage on yourself, but the state does not require it.
Can I cover myself as an Illinois sole proprietor?
Yes, voluntarily. You can elect to be covered by having the carrier add you to a policy, even though the state does not require it for a solo owner.
When do I have to get coverage as a sole proprietor?
Once you hire. The moment you have any employee, full-time or part-time, coverage becomes mandatory for your staff, even though you are not counted yourself.
A client wants proof of workers comp but I work alone. What do I do?
You can buy a policy anyway. Many solo owners get a policy built for an owner with no employees just to satisfy a contract, since general contractors and property managers often will not let you work without it.
Will a general contractor charge me if I have no coverage?
Often yes. If you cannot show your own workers' comp, a general contractor may add the cost of covering you to what it charges, so carrying your own policy can actually save money on a job.
Do I have to cover a helper I pay occasionally?
Usually yes, if they are an employee. Illinois requires coverage from the first employee, and a paid helper the state would treat as your employee generally has to be covered.
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 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)?
- What insurance do I need for a contractor license?
- Workers compensation insurance, explained
- What workers comp costs (national guide)
- Do sole proprietors need workers comp?
- Hiring your first employee: what changes
- Illinois cleaning and janitorial 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.