Construction Claim Rules in Illinois

Statutory interest rate

9% / year general postjudgment (varies by claim/debtor type)

9% is the default postjudgment rate, 6% against a government entity and 5% for consumer debt of $25,000 or less. Prejudgment interest of 6% applies only to personal injury and wrongful death claims. A contract claim's prejudgment interest runs under the Interest Act at 5%.

Compounding: Not specified by the statutes; treat as simple interest.

Citation: 735 ILCS 5/2-1303; 815 ILCS 205/2 (contract prejudgment)

Source: https://codes.findlaw.com/il/chapter-735-civil-procedure/il-st-sect-735-5-2-1303/

Illinois has several different rates depending on the claim type and the phase of the case. Confirm which one applies to your claim before using any single number.

Accrual: breach of contract claim

From when the money becomes due under the written instrument, generally the breach date

The Interest Act (815 ILCS 205/2) allows interest on money due on an instrument in writing from the time it becomes due, which for a construction contract is generally the date payment was owed or the date of breach.

Citation: 815 ILCS 205/2

Source: https://law.justia.com/codes/illinois/chapter-815/act-815-ilcs-205/

The Justia link goes to the full Interest Act chapter; Justia doesn't host section 205/2 on its own page. Confirm the section 2 text there or at ilga.gov before relying on it.

Accrual: property damage / tort claim

Notable gap: Illinois's main prejudgment-interest statute doesn't reach property damage at all

A 2021 amendment to 735 ILCS 5/2-1303 added a 6% prejudgment interest right running from when the action was filed, but by its own terms that right is limited to personal injury and wrongful death actions. It does not extend to property damage claims. A property-damage claimant would instead have to rely on the general Interest Act (815 ILCS 205/2, same as the contract entry above) if the claim can be framed as money due on an account or written instrument, or go without statutory prejudgment interest.

Citation: 735 ILCS 5/2-1303 (as amended 2021)

Source: https://codes.findlaw.com/il/chapter-735-civil-procedure/il-st-sect-735-5-2-1303/

This is a genuinely counterintuitive result worth confirming with counsel: don't assume Illinois property-damage claims automatically carry the same prejudgment interest right that personal injury claims now do.

Actual Cash Value rule

Replacement cost minus depreciation (statutory), labor cannot be depreciated

Illinois Supreme Court held insurers may not depreciate labor costs absent policy language expressly permitting it.

Citation: Sproull v. State Farm Fire & Cas. Co., 2021 IL 126446

Source: https://law.justia.com/cases/illinois/supreme-court/2021/126446.html

The link goes to the full Sproull opinion. The base replacement cost less depreciation definition comes from the policy form rather than a statute.

ACV statute or regulation

No Illinois insurance-code statute or regulation bans labor depreciation, but the Illinois Supreme Court has held that labor cannot be depreciated when the policy leaves ACV and depreciation undefined, effectively producing a strong statewide rule.

Illinois has not enacted an insurance-code statute or Department of Insurance regulation that expressly restricts depreciating labor. Instead the rule comes from the Illinois Supreme Court's decision in Sproull v. State Farm Fire & Casualty Co., 2021 IL 126446 (Ill. 2021), which held that where a policy leaves both 'actual cash value' and 'depreciation' undefined, the insurer may not depreciate the intangible labor component of a repair estimate when calculating ACV. This is case law rather than a statute, but because it is a controlling state supreme court decision it functions in practice like a statewide rule for undefined-term policies. The Illinois Administrative Code's unfair claims practices rule (50 Ill. Adm. Code 919) was checked and does not itself define ACV or address labor depreciation.

Citation: Sproull v. State Farm Fire & Cas. Co., 2021 IL 126446; 50 Ill. Adm. Code 919 (reviewed, no ACV/labor provision found)

Source: https://ilcourtsaudio.blob.core.windows.net/antilles-resources/resources/29b130f8-9250-4945-ac16-22f8b6813c79/126446_AMB2.pdf

This is a case-law rule, not a statute or adopted regulation, so it sits at the edge of what this field is meant to capture. Flagging it because it functions as a de facto statewide restriction on labor depreciation and the site's users would likely want to know about it, but it should probably be labeled as case law rather than as a codified statute if the distinction matters for how it is displayed.

Recoverable depreciation holdback

No Illinois statute or regulation sets a deadline or procedure for paying withheld recoverable depreciation, so the policy terms control.

The Department of Insurance's consumer guidance says depreciation holdbacks are common practice and that policies usually set a time limit, which makes this a policy term rather than a statutory requirement. Separately, Illinois is one of the states that do not allow labor to be depreciated when calculating ACV unless the policy expressly says otherwise, which follows from Sproull v. State Farm.

“No damages for delay” clause enforceability

Enforceable but construed strictly, with two recognized exceptions

The Illinois Supreme Court held that a no-damages-for-delay clause is enforced, but is construed strictly against the party seeking its protection. It recognized two exceptions grounded in ordinary contract principles: delay caused by the other party's bad faith, fraud, concealment, or misrepresentation (rooted in the implied duty of good faith and fair dealing); and delay not within the parties' reasonable contemplation when they contracted, using reasonable foreseeability as the touchstone.

Citation: J & B Steel Contractors, Inc. v. C. Iber & Sons, Inc., 162 Ill. 2d 265 (1994)

Source: https://law.justia.com/cases/illinois/supreme-court/1994/76070-7.html

Construction contract filing deadline

10 years for a written contract claim

Illinois sets a 10-year limitations period for actions on written contracts and similar written instruments, which covers an ordinary written construction contract claim. That is longer than most states. Two deadlines sit in front of that one on most construction claims. A mechanic's lien and a payment bond claim each run on their own, far shorter clock, counted from last furnishing rather than from breach and missing either one removes the security while leaving the contract claim alive but unsecured. Check those dates first. Accrual is the other half of the question: the period runs from breach, which on a payment dispute is usually the date payment came due rather than the date the work was done.

Citation: 735 ILCS 5/13-206

Source: https://law.justia.com/codes/illinois/chapter-735/act-735-ilcs-5/article-xiii/

A separate, shorter statute of repose applies to construction defect claims. Check it for any defect or warranty claim.

State unemployment insurance (SUTA)

Illinois's new-employer unemployment tax rate is 3.35% of the first $14,250 in wages per employee for 2026.

Most new employers pay 3.35% for 2026, while new employers in administrative support and waste management (NAICS sector 56) pay a higher 3.45%; both figures already include the state's 0.55% fund-building surtax. Established, experience-rated employers pay anywhere from about 0.75% to 7.05%, also inclusive of the surtax. The taxable wage base increased to $14,250 per employee for 2026.

Citation: Illinois Department of Employment Security (IDES)

Source: https://ides.illinois.gov/content/dam/soi/en/web/ides/ides_forms_and_publications/EA-50_2026.pdf

Last checked: 2026-08-26

These figures come from the Department of Employment Security's own EA-50 (2026) publication. Several payroll guide websites publish different figures for Illinois, so use the EA-50 or your own rate notice.

Workers' compensation rating

Illinois uses NCCI advisory rates rather than its own rating bureau.

Illinois relies on NCCI to develop workers' compensation loss costs and classification codes, filed with the Illinois Department of Insurance for approval. Carriers then apply their own loss-cost multipliers on top of the approved NCCI figures, the standard advisory-rate model used across most states.

Citation: NCCI Illinois State Advisory Forum, Illinois Department of Insurance

Source: https://www.ncci.com/Articles/Documents/II_StateAdvisoryForumState_IL_2025.pdf

Prevailing wage law

Illinois requires prevailing wages on essentially all public works contracts, with no minimum dollar threshold.

The Illinois Prevailing Wage Act requires contractors and subcontractors to pay locally prevailing wages to laborers, workers and mechanics employed on public works projects funded in whole or in part by public funds. Unlike many other states, Illinois does not set a minimum contract dollar amount below which the law does not apply, coverage instead turns on whether the work qualifies as a public works project. The Illinois Department of Labor publishes county-by-county prevailing wage rate schedules and administers compliance.

Citation: Illinois Prevailing Wage Act, 820 ILCS 130/0.01-12

Source: https://labor.illinois.gov/laws-rules/conmed/prevailing-wage-act.html

Comparative / contributory negligence rule

Modified comparative fault, recovery barred above 50% fault (51% bar)

Recovery is reduced in proportion to fault and barred once the worker is more than 50% at fault. A worker exactly 50% at fault still recovers half.

Citation: 735 ILCS 5/2-1116 (text without the changes made by P.A. 89-7); Best v. Taylor Mach. Works, 179 Ill. 2d 367, 689 N.E.2d 1057 (1997) (striking P.A. 89-7)

Source: https://codes.findlaw.com/il/chapter-735-civil-procedure/il-st-sect-735-5-2-1116/

Verified against: statute text of 735 ILCS 5/2-1116 as published without the P.A. 89-7 changes, cross-read against a source printing the struck-down subsections

Non-economic damages cap

No general cap on non-economic damages

Most states cap non-economic damages only in medical malpractice actions, which does not reach a third-party construction claim. Economic losses, medical bills, lost wages, future earning capacity, are not capped by these statutes.

OSHA plan

Public-sector-only state plan; private construction sites remain under federal OSHA

Illinois operates an OSHA-approved state plan covering only public-sector employees. Private construction sites remain under federal OSHA. That split decides where the file lives. A private construction site is inspected by a federal OSHA area office, with any citation contested before the federal Occupational Safety and Health Review Commission. A public employer on the same kind of work answers to the state plan instead, before the state's own review body. Reporting deadlines are the same either way: a work-related fatality within 8 hours, an inpatient hospitalisation, amputation or loss of an eye within 24 hours. For a construction claim the inspection file matters more than the citation: photographs, measurements, witness statements and the inspector's narrative are usually obtainable and are often the best contemporaneous record of the site.

Citation: 29 U.S.C. § 667; Illinois public-employee safety plan

Source: https://www.osha.gov/stateplans/il

Weight of an OSHA violation in a negligence case

Evidence of negligence in Illinois, not negligence per se

Illinois courts hold that an OSHA violation does not automatically prove negligence, but OSHA citations and reports are admissible as persuasive evidence. Under Illinois negligence per se doctrine a statutory violation reaches full per se status only where the legislature intended strict liability. Otherwise it is rebuttable prima facie evidence of negligence.

Citation: Schultz v. Ne. Ill. Reg'l Commuter R.R. Corp., 775 N.E.2d 964, 986 (Ill. 2002).

Source: https://storage.googleapis.com/jnl-bcls-j-bclr-files/journals/1/articles/232/63a30c0a100a2.pdf

Third-party contribution against the employer

Illinois allows contribution against the employer, but Kotecki v. Cyclops Welding caps it at the employer's own workers' compensation liability absent a waiver: a real, quantified limit, not a bar.

The Construction Contract Indemnification Act and the Contribution Act both matter here, alongside retained control principles under Restatement § 414, for whether a general contractor or owner can be reached directly.

Citation: 820 ILCS 305; 740 ILCS 35, 740 ILCS 100; Kotecki v. Cyclops Welding Corp., 146 Ill.2d 155 (1991).

Source: https://law.justia.com/cases/illinois/supreme-court/1992/68568-7.html

Injury-severity gate on contribution claims

Direct suit is barred, but the employer can still be brought in for contribution: capped at the employer's own workers' compensation liability under the Kotecki rule.

820 ILCS 305 generally bars a direct employer negligence suit. Illinois recognizes contribution against the employer, but Kotecki v. Cyclops Welding caps it at the employer's workers' compensation liability absent a waiver. In practice exclusivity takes the direct employer off the tort table entirely, whatever the OSHA file shows. The claim runs against the other parties on the site: the general contractor, the owner, another subcontractor, an equipment manufacturer. The employer or its carrier then asserts a lien against whatever the worker recovers from those parties, so the figure the worker actually keeps is the recovery less the lien, the fee and the costs. Whether the lien is reduced for the cost of obtaining the recovery is a separate state question worth asking early, because it moves the net more than most people expect.

Citation: 820 ILCS 305; Kotecki v. Cyclops Welding Corp., 146 Ill.2d 155, 585 N.E.2d 1023 (1991).

Source: https://law.justia.com/cases/illinois/supreme-court/1992/68568-7.html

Distinctive state doctrine

Illinois's Kotecki cap is a distinctive rule: contribution against the employer is allowed, but judicially capped at the employer's own workers' compensation liability absent a waiver.

Most states either bar contribution against the employer outright or allow it in full. Illinois sits in the middle with the Kotecki cap, which limits contribution to the employer's own workers' compensation liability unless the employer waived the cap by contract. The Construction Contract Indemnification Act sits alongside it.

Citation: Kotecki v. Cyclops Welding Corp., 146 Ill.2d 155 (1991); 740 ILCS 35.

Source: https://law.justia.com/cases/illinois/supreme-court/1992/68568-7.html