Get an Instant Quote on Self-Insurer's Workers' Compensation Bond
Introduction
From our perspective, businesses that choose to self-insure for workers' compensation in Illinois must obtain the Illinois - Self-Insurer's Workers' Compensation Bond as part of their legal requirements.
Self-insured employers take on the responsibility of directly paying claims for workplace injuries, which means the state requires financial protection to guarantee that injured employees receive their benefits.
Without this bond, a company cannot legally self-insure. It acts as a safety net, ensuring that employees receive compensation even if the employer faces financial difficulties.
Employers working with IBEW Local No. 117 may also need the IBEW Local No. 117 - Wage and Fringe Benefits ($50,000) Bond, which guarantees wage and benefit payments for union workers. These bonds help businesses maintain compliance and trust within the industry.
Common Misconceptions About This Bond
We’ve noticed that many businesses assume that being financially stable eliminates the need for a bond. However, Illinois law requires this bond for all self-insured employers, regardless of financial standing.
Another misunderstanding is that this bond protects the employer—it does not. Instead, it protects employees and ensures they receive compensation in case of workplace injuries.
Some employers also believe this bond is a one-time requirement, but the bond must be renewed regularly to maintain compliance.
How This Bond Works
Based on our experience, the Illinois - Self-Insurer's Workers' Compensation Bond is structured to guarantee employer obligations under state workers' compensation laws.
This bond involves:
- The Employer (Principal) – The company that self-insures for workers' compensation.
- The Illinois Workers' Compensation Commission (Obligee) – The state agency that requires the bond.
- The Surety Company – The provider of the bond, which guarantees payments if the employer defaults.
If an employer fails to cover workers' compensation claims, the Illinois Workers' Compensation Commission can file a claim against the bond. The surety company may cover the costs, but the employer must repay the surety for any payouts.
This structure ensures that employees receive their benefits, even if a business encounters financial hardship.
Steps to Secure This Bond
What we’ve discovered is that obtaining this bond can be straightforward when working with an experienced surety provider like Swiftbonds.
Here’s how businesses can obtain this bond:
- Determine the bond amount – The Illinois Workers' Compensation Commission sets the bond amount based on payroll size and potential claim liability.
- Submit an application – Employers provide financial statements, business details, and claims history.
- Receive a quote – Bond rates depend on credit history, financial strength, and industry risk.
- Pay the premium – Employers purchase the bond, which remains active as long as the business is self-insured.
- File the bond with the state – The bond must be submitted before approval for self-insurance.
Swiftbonds offers competitive rates, fast approvals, and expert guidance to help businesses meet this requirement.
For contractors working in Village of Riverside, IL, obtaining a Village of Riverside, IL - Contractor License ($10,000) Bond may also be necessary. This bond ensures compliance with local regulations and financial accountability for licensed contractors.
Risks of Not Having This Bond
In our observation, businesses that fail to obtain this bond expose themselves to serious consequences, including:
- Loss of self-insurance status
- Legal action from the state
- Fines and penalties
- Delays in business operations
- Risk of financial liability for unpaid claims
By securing this bond, businesses stay compliant, protect workers, and avoid unnecessary legal trouble.
Benefits of This Bond
We’ve learned that this bond provides several key advantages, such as:
- Authorization to self-insure for workers' compensation
- Financial security for employees' benefits
- Compliance with Illinois law
- Trust and credibility within the industry
Employers who obtain this bond can operate confidently, knowing they are meeting all legal requirements.
Conclusion
The Illinois - Self-Insurer's Workers' Compensation Bond is a non-negotiable requirement for businesses choosing to self-insure for workers' compensation.
By obtaining this bond through Swiftbonds, employers protect workers, maintain compliance, and avoid costly legal issues.
Frequently Asked Questions
Who is required to have this bond?
Any employer in Illinois that chooses to self-insure workers' compensation coverage must obtain this bond.
How much does this bond cost?
The bond premium is a percentage of the required bond amount, based on financial health and claims risk.
What happens if an employer fails to pay claims?
If an employer defaults on workers' compensation payments, the state may file a claim against the bond, and the surety company may cover the costs. However, the employer must reimburse the surety for any claims paid.
Does this bond need to be renewed?
Yes. The bond must be renewed periodically to maintain compliance with the Illinois Workers' Compensation Commission.
Can a company with bad credit still get this bond?
Yes. Swiftbonds offers bond solutions for all credit levels.
How quickly can this bond be issued?
Most bonds are approved within 24 hours, ensuring that businesses meet their deadlines without delays.