Key Takeaways
- Illinois follows a modified comparative negligence system with a 50% bar for fault allocation
- Commercial general liability policies use file and use rate regulation
- Joint and several liability applies when defendants are more than 25% at fault
- Professional liability insurance is required for certain licensed professions
- Punitive damages insurability is limited in Illinois based on public policy
Illinois General Liability Insurance
Illinois has specific requirements for general liability insurance that agents must understand.
Modified Comparative Negligence
Illinois uses modified comparative negligence with a 50% bar:
How It Works
- Fault is allocated among all parties
- Damages reduced by percentage of fault
- 50% Rule: If 50% or more at fault, NO recovery
- Joint and several liability modified
Joint and Several Liability
Illinois modified joint and several liability (735 ILCS 5/2-1117):
| Defendant Fault | Liability Rule |
|---|---|
| More than 25% responsible | Joint and several liability |
| 25% or less responsible | Several liability only (their share) |
Exam Tip: Illinois uses 25% threshold for joint and several liability, not 50%. This is different from some other states.
Commercial General Liability (CGL)
Illinois CGL policies must comply with state requirements:
Required Elements
- Occurrence vs. claims-made coverage clearly disclosed
- Coverage territory defined
- Limits per occurrence and aggregate
- Defense costs—duty to defend
- Pollution exclusion with disclosure
Rate Regulation
Under file and use:
- Rates filed with DOI
- Can be used immediately
- Subject to post-implementation review
- Must be actuarially justified
Professional Liability
Illinois requires or regulates professional liability for various professions:
State-Mandated Coverage
| Profession | Requirement |
|---|---|
| Attorneys | ARDC requires disclosure if no coverage |
| Physicians | Medical malpractice coverage common |
| Architects | E&O for licensed practice |
| Engineers | E&O for licensed practice |
| Real Estate Agents | E&O recommended |
| Insurance Agents | E&O recommended |
Pollution Liability
Illinois has specific environmental liability requirements:
Disclosure Requirements
- Pollution exclusion must be disclosed
- Environmental impairment liability options explained
- Underground storage tank regulations (Illinois EPA)
- Cleanup cost coverage options
Illinois Environmental Laws
- Illinois Environmental Protection Act applies
- Illinois EPA oversight
- Strict liability for certain hazardous activities
- Site cleanup requirements under state law
Punitive Damages
Illinois has restrictions on insuring punitive damages:
Illinois Rule
| Feature | Details |
|---|---|
| Insurability | Limited—public policy concerns |
| Direct Punitive | Generally NOT insurable |
| Vicarious Punitive | May be insurable in some cases |
| Coverage | Depends on policy language and circumstances |
Key Differences
- Illinois is more restrictive than states like Texas
- Direct punitive damages generally uninsurable
- Vicarious liability punitive damages—case by case
- Policy language and facts control coverage
Products Liability
Illinois products liability insurance:
Coverage
- Bodily injury from defective products
- Property damage from defective products
- Products-completed operations hazard
- Aggregate limits apply
Illinois Law
- Strict liability for manufacturing defects (Restatement)
- Negligence for design defects
- Failure to warn claims common
- Statute of repose: 12 years for products (with exceptions)
At what percentage of fault does joint and several liability apply in Illinois?
Are punitive damages generally insurable in Illinois?