do you need workman's compensation if you are an LLC

The fact that an employee is categorized as "contract" or receives a 1099 does not necessarily answer the question of whether they are covered under workers' compensation. These situations are decided on a case by case basis and depend on the amount of control the employer has over the worker. It's best to consult with an attorney before jumping to a conclusion. In Illinois, employers are required to be insured, even if they have just one part-time employee. There are exceptions, of course. And members of an LLC can exempt themselves.