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Small Business Insurance in the Prairie State
With 1.2 million small businesses to its name, Illinois boasts the fifth-highest number of small businesses in the nation. Small businesses comprise 99.6% of all businesses in the state—the sixth-highest percentage by state in the U.S.—and employ 2.5 million people, or 45.5% of Illinois's private workforce, with an estimated 68,276 new jobs being created by small businesses every year. And Illinois has reason to be proud of its diversity; more than 300,000 of its small businesses are minority-owned.
With an estimated 7,597 new small businesses opening every year, Illinois is a welcoming state for entrepreneurs. But because of Illinois's strict business regulations—and its steep financial penalties for noncompliance—it's essential for small business owners to be aware of the state's requirements.
Top covered industries in Illinois
Many small businesses in Illinois can find insurance coverage with Hiscox with tailored policies that address each business's specific needs and risks. Some of the most common small business in Illinois that are insured through Hiscox include IT consultants, photographers, real estate agents, business consultants and personal trainers.
The many corporate offices in Chicago and beyond create numerous opportunities for Illinois's IT consultants, whose everyday work with high-end equipment and sensitive personal and business information brings a consistent level of risk.
Because IT consultants can have a huge impact on a client's business, they can benefit from professional liability insurance, also called errors and omissions insurance. This policy would protect an IT consultant if, for example, they review a client's website and network security in order to implement new security procedures—and, a month later, the client's website gets hacked and they lose revenue from the site being down. Even if the IT consultant hasn't made a mistake, the client could still make a claim against them. A professional liability policy could cover defense costs as well as any settlement or judgment.
General liability insurance protects against a third party’s claims of bodily injury or property damage. If an IT consultant is at a client’s site, for example, and spills a cup of coffee on the client’s server, a general liability policy could cover the cost to replace the server. And a business owner's policy (BOP), which combines general liability insurance and business property insurance, would cover damage to the IT consultant's property or equipment, if, for instance, a laptop gets stolen, a server is damaged during a power surge, or an office is flooded by a burst pipe.
Whether they shoot for the news, for corporate clients' social media pages, for personal portraits or other Illinois customers, photographers have to liaise with clients, navigate challenging environments, and get the perfect shot—all while managing their valuable equipment. A photographer's job can be exciting, but all that excitement can bring a heightened risk.
Photographers can help protect their businesses by securing reliable professional liability insurance coverage, also called errors and omissions insurance, which covers claims against businesses that provide professional services. These claims might arise, for example, if a difficult client is dissatisfied with a photographer's shots or if a faulty hard drive prevents a photographer from delivering on a contract.
General liability insurance, which protects against claims of bodily injury or property damage, provides another layer of protection. A photographer might face claims like these if a client trips over a piece of equipment and sprains their ankle, or if the photographer's assistant is heard gossiping about a high-profile client who subsequently files a libel or defamation lawsuit.
In addition, a business owner's policy (BOP), which combines general liability insurance and business property insurance, can protect the investment of a photographer's professional equipment. For example, if a photographer's camera bag falls out of their car and onto the concrete, damaging a lens and a portable hard drive, a Hiscox business owner's policy could provide coverage for the damaged equipment and help cover the cost of recovering the data.
Real estate agents
Buying or selling a home can be a stressful time, and that's especially true in Illinois, where sellers have recently struggled with decreasing property values. Real estate agents may have to face disappointed clients who make claims of alleged failures to disclose defects, disclaimers, clear boundary lines and other issues that arise in the sale of a property.
Reliable professional liability insurance coverage, also called errors and omissions insurance, protects against such claims against businesses that provide professional services—particularly in industries such as real estate, where large sums of money (and many emotions) are at stake in each transaction. For example, professional liability insurance can protect in cases of buyer's remorse, such as if the new owner of a lakefront property claims, however falsely, that they overpaid because the agent did not disclose that the property does not include the lake frontage. Professional liability insurance will also protect against claims of wrongful discrimination, such as if clients claim that they weren't shown certain homes because of their race, religion or gender. Even when such claims are baseless, they can result in lawsuits that put the real estate agent's business and reputation at risk.
In addition, general liability insurance, which protects against third-party claims of bodily injury or property damage, can pay for any damages incurred if, for example, a real estate agent accidentally knocks over an expensive vase while showing a client's home or if a client trips and falls while visiting the real estate agent's office.
Because their services might include maintaining confidential information, offering managerial advice, and recommending financial plans and investment strategies, the work of a business consultant in Illinois is particularly sensitive, so they can benefit from small business insurance.
Professional liability insurance, also called errors and omissions insurance, can cover claims against businesses that provide professional and personal services, and it offers protection even in cases where the business consultant hasn't made a mistake. For example, if a business consultant advises a client to change some internal process to increase productivity, the client does not implement the recommendations exactly as specified, and productivity subsequently drops instead of improving, the client may decide to sue. A Hiscox-obtained defense attorney would defend the business consultant against this baseless claim of negligence.
General liability insurance, which protects against third-party claims of bodily injury or property damage, is also helpful for a business consultant. General liability will cover medical costs if, for example, a client slips and falls in the consultant’s office. It will also cover repair or replacements costs if a client’s property is damaged.
Business consultants can also benefit from a business owner's policy (BOP), which combines general liability insurance and business property insurance. It can cover damage to property or equipment, such as if laptops, webcams, phones or printers are stolen or damaged.
Personal trainers in Illinois might help clients train for competition, recover after injuries, or simply get in shape, and as personal trainers know well, a lot can go wrong when training. Whether it's an injury sustained during a workout or chronic pain that occurs after sessions, the risks that come along with any fitness regimen may prompt litigious clients to file a claim against personal trainers, even when the trainer has done nothing wrong.
Professional liability insurance, also called errors and omissions insurance, can cover claims against businesses that provide professional and personal services, and it offers protection even in cases where the personal trainer hasn't made a mistake. For example, if an older client happens to suffer chest pain and has to be rushed to the hospital after a session with a personal trainer, he may later claim that the personal trainer caused his heart attack and mental anguish. A Hiscox professional liability policy will provide an attorney to defend against such claims, and will cover any settlement or judgment up to policy limits.
In addition, the physical nature of a personal trainer's business can use the protection of general liability insurance, which protects against claims of bodily injury or property damage. This would protect the personal trainer's business if, for example, a client trips over a stack of weights and blames the personal trainer for not keeping the area clear and safe.
More professions we insure in Illinois
Illinois Small Business Insurance
If you’re a small business owner in Illinois and you are looking for liability insurance for your business, you have to come to the right place. We customize our small business insurance in Illinois to the specific risks you face, ensuring you get the right coverage at the right price. Hiscox small business insurance products include:
General Liability Insurance for Illinois
General liability insurance, known as Commercial General Liability (CGL), protects your business from another person or business’s claims of bodily injury, associated medical costs, and damage to property. Some examples of what could be covered are below:
- Bodily injury: A client falls over their personal trainer’s workout bag and the trainer is found legally liable for the injury. A general liability insurance policy could cover the claim for medical expenses up to the policy limits.
- Property damage: An IT consultant spills coffee on a client’s server causing damage and loss of data. General liability insurance could protect consultants against third-party claims of bodily injury, associated medical costs, and property damage.
- Personal injury: A real estate agent is overheard talking about a client in a false and unflattering way. The client finds out about the conversation and sues for slander. A general liability policy could cover the subsequent claim, up to policy limits, and pay for an attorney to defend the agency if necessary.
Learn more about general liability insurance.
Professional Liability Insurance for Illinois
Professional liability insurance, also known as errors and omissions insurance (E&O insurance), covers another person’s claims against businesses that provide professional and personal services. Some examples of what could be covered include:
- Dissatisfied client: A business consultant is working for a client who continually changes the scope of the project. When the consultant is not able to meet the original deadline for the expanded project, the client sues.Professional liability insurance could cover the cost of defending you up to policy limits, even if you haven't made a mistake.
- Negligence: A tax accountant is preparing taxes for this client. The client asks about a deduction he heard about and the tax preparer adds it in without checking to make sure it is accurate and applies to his client. The IRS fines the client who sues the tax preparer for negligence. A professional liability insurance policy could protect the tax accountant, including defense costs, up to policy limits.
Learn more about professional liability insurance.
Business Owners Policy for Illinois
Business owners policy (BOP) is a combination of general liability and business property insurance. BOP is often used to provide balanced coverage for small businesses who also want to protect their own business equipment. Some examples of what could be covered are below:
- Office insurance for fire and business interruption.
- Electronic data loss insurance.
- Hired or non-owned vehicle liability insurance.
- Commercial crime insurance to cover the dishonesty of your employees.
Learn more about business owners insurance.
Did you know?
In 2016, U.S. companies had at least a 10.5% chance of having an employment charge filed against them, but in Illinois, that chance was 35% greater—for one of the highest rates of employee lawsuits in the country. This stems in part from Illinois's labor laws, which go above and beyond the protections guaranteed by the federal government. In addition to freedom from discrimination based on race, color, national origin, sex, religion, age, disability and citizenship status, Illinois prohibits discrimination based on sexual orientation, pregnancy, gender identity, military status, unfavorable military discharge, arrest record, being a victim of domestic violence, using the mailing address of a shelter or social service provider, and more.
While some of these protections only apply to employers with at least 15 employees, employers of any size must comply with the law prohibiting disability discrimination. In addition, like most states, Illinois is an "at-will" employment state, meaning that employees can be terminated at any time for any reason. However, fired employees can still sue for breach of contract if their employment contract promises job security, and in Illinois, an employment contract may be written, oral or even implied—the idea that an employer has acted in a way that created an impression of job security.
These protections are for the workers' benefit, but they also open the door for potential wrongful termination or discriminatory hiring lawsuits. A more recent development has also prompted a new type of employee lawsuit in the Land of Lincoln: In 2008, Illinois enacted the Biometric Information Privacy Act, the most stringent law of any state regarding the collection of biometric information, such as fingerprints. In 2017, several class-action lawsuits started taking on employers who use fingerprint-operated time clocks.
As labor laws and small business regulations are constantly evolving, small businesses in Illinois need to stay on top of potential litigation risks—and protect themselves with the right insurance coverage for the specific risks they face.
Illinois workers compensation laws
According to the National Federation of Independent Businesses, virtually every employer in Illinois is required to carry workers compensation insurance for all employees, including family members. Only sole proprietors, business partners, corporate officers, and members of LLCs may choose to exempt themselves—but that option typically does not apply to companies in the construction business or in other "extra hazardous" industries.
Penalties for employers that fail to obtain workers compensation insurance are steep. Since 2006, the Illinois Workers Compensation Commission has collected over $7 million in fines from companies without workers compensation insurance, which can be up to $500 for every day of noncompliance, with a minimum fine of $10,000. If the company does not or cannot pay this penalty, its corporate officers can be held personally liable—and if the corporate officers are found to have knowingly failed to obtain insurance, they are guilty of a Class 4 felony. In addition, the Commission may issue a work-stop order on a business that has been found to have knowingly failed to provide workers compensation insurance.
If a worker is injured while an employer is uninsured, that worker may sue their employer in civil court, where—unlike workers compensation settlements—benefits are unlimited.
How Hiscox can help your Illinois business?
Hiscox doesn't believe in one-size-fits-all insurance policies. Instead, we tailor each client's coverage—whether it's general or professional liability insurance, a business owner's policy, workers compensation or beyond—to the need of not only the industry, but the individual business. We also offer a range of benefits:
- Flexible payment options. Our monthly payment schedule, at no added fee, can help manage a small business's cash flow.
- Tailored insurance. With Hiscox, you only pay for the coverage you need.
- Claims responsiveness. When a covered claim is reported, Hiscox will immediately assign a dedicated claims representative to assist you.
- Worldwide coverage. An Illinois business insured through Hiscox is covered for work done anywhere in the world, as long as the claim is filed in the U.S., a U.S. Territory or Canada.
Get a fast, free quote now, and get the confidence that Hiscox can bring to an Illinois business. If you prefer, you can call us at 1-866-283-7545 and speak with a Hiscox licensed agent, Monday – Friday, 7am – 10pm ET.
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Important Notice to Illinois Residents
Following the recent storms that caused extensive damage in Illinois, we have taken steps at the request of the Department of Insurance to help our policyholders and claimants in the affected area – Christian County. Any policies issued in this county for the period between November 23, 2018 and January 23, 2019, we will:
- Not issue any cancellation or nonrenewal and may extend the moratorium as warranted in light of an individual’s particular circumstances, as we determine in our reasonable discretion;
- Provide a 60-day extension to comply with policy provisions that impose a time limit, such as the need to submit a proof of loss or claim information or make necessary repairs; and
- Refrain from canceling or non-renewing policies due to an increase in the risk originally accepted or geographic location.
Illinois consumers may contact the Department of Insurance by calling its toll-free complaint hotline at 1-866-445-5364 or submitting a complaint online at https://mc.insurance.illinois.gov/messagecenter.nsf
This information is provided to assist you in understanding the coverage we offer and does not modify the terms and conditions of any insurance policy, nor does it imply that any claim is covered. Coverage is subject to underwriting and may not be available in all states.
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