Most small Illinois businesses pay somewhere from a few hundred to a few thousand dollars a year for workers' comp, and a higher-risk trade like roofing runs well above that. There is no single set price; what you pay comes down to three things: how much payroll you run, the type of work your employees do, and your claims history. Illinois does not set one fixed price every insurer must charge; instead NCCI, the state's licensed rating organization, files advisory rates and loss costs that the Illinois Department of Insurance reviews, and each carrier applies its own multiplier to set the final price. As of mid-2026 those advisory figures have edged down, so shopping pays off.
Who this is for: Illinois employers who must carry comp and want to understand what sets the price and how to keep it down.
The short version
- Your premium is roughly your payroll, counted in 100-dollar units, times a rate for the type of work.
- The category your work falls into for pricing, often called the class code, moves the price the most.
- A score built from your past claims, the experience modification rate, raises or lowers your cost.
- Illinois does not set one fixed price. A rating body (NCCI) publishes baseline rates, then each insurer adds its own markup, so the same business gets different quotes from different carriers and shopping around pays off.
- As of mid-2026, Illinois's voluntary advisory loss costs edged down about 1.2 percent effective January 1, 2026.
What drives your price
| Factor | What it means | Effect on cost |
|---|---|---|
| Payroll | Your total wages, counted in 100-dollar units | More payroll, more premium |
| Type of work (class code) | A category for the risk of your work | Roofing costs far more than clerical |
| Claims history (experience modification rate) | A score built from your past claims | A clean record lowers it, a bad one raises it |
| Carrier | Each insurer applies its own multiplier to the loss costs | Shopping can change the price meaningfully |
How Illinois sets rates
Illinois is a private, competitive market with no state fund, and it uses NCCI as its licensed rating organization. Illinois is unusual in that NCCI files both an advisory rate and advisory loss costs, plus a separate rate for the plan of last resort, and all of it is submitted to and approved by the Illinois Department of Insurance. Loss costs are only the raw claims-cost piece; a carrier that uses them applies its own loss-cost multiplier for expenses and profit, which is why two carriers can quote the same business differently. As of mid-2026, NCCI's filing effective January 1, 2026 carried a voluntary loss-cost decrease of about 1.2 percent and a small advisory-rate decrease, with a slight increase to the plan-of-last-resort rate. Treat exact percentages as a moving target and confirm the current filing when you shop.
How to keep the cost down
The two levers you control most are your classification and your claims. Making sure each employee is placed in the correct type-of-work category matters, because a wrong category can overcharge you for years. Keeping claims down improves the score built from your history, which directly lowers your rate. Reporting your payroll accurately at audit avoids a surprise bill later. And because carriers apply different multipliers to the same loss costs, comparing carriers at renewal is one of the simplest ways to make sure you are not overpaying, especially while advisory figures are drifting down.
A Rockford example
Illustrative, not a quote. A Rockford light-manufacturing shop with fifteen workers gets a renewal that looks high. When we review it, part of the office payroll was rated at the higher shop-floor category by mistake, inflating the premium. We correct the classification, confirm the claims-history score is applied correctly, and shop the account against several carriers that apply different multipliers to the same loss costs. The corrected classes and fresh quotes bring the price down without cutting coverage. See our workers comp for manufacturers page.
Real questions Illinois owners ask
How is workers comp priced in Illinois?
On three things: payroll, the type of work, and your claims history. Your premium is roughly your payroll in 100-dollar units times a rate for the type of work, adjusted by a score from your past claims.
Who decides the workers comp rates in Illinois?
A rating organization called NCCI publishes the baseline rates, and then each insurer adds its own markup. NCCI is Illinois's licensed rating body, and unusually it files an advisory rate as well as loss costs, so final prices vary from carrier to carrier.
Why do two carriers quote me different prices?
Because they add different amounts. NCCI's loss costs are only the raw claims-cost piece, and each carrier applies its own multiplier for expenses and profit, so quotes vary between carriers.
What is the biggest driver of my price?
The category your work falls into, often called the class code. It reflects how risky the work is, and it moves the price far more than most other factors.
Are Illinois workers comp prices going up or down?
Down slightly, as of mid-2026. The voluntary advisory loss costs edged down about 1.2 percent effective January 1, 2026, though exact figures change with each filing.
How can I lower my workers comp cost?
Classify your payroll correctly, keep claims down to improve your history score, report payroll accurately at audit, and shop carriers at renewal since they apply different multipliers to the same loss costs.
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 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)
- Glossary: workers comp class code
- What is an experience mod, and how do I lower it?
- Illinois manufacturer 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.