Best Small Business Insurance in Iowa

Iowa Insurance Requirements

The State of Iowa currently requires most Iowa businesses with employees to carry workers' compensation insurance. If your business uses vehicles, they must be covered by commercial auto insurance.

Commercial Auto Insurance

The Iowa Division of Insurance provides the minimum requirements for auto insurance in the state:

Iowa law requires minimum liability coverage covering the following: $20,000 of bodily injury to or death of one person in any one accident; $40,000 because of bodily injury to or death of two or more persons in any one accident; and $15,000 because of injury to or destruction of property of others in any one accident.

You can also read the text of state statute 321A.21 concerning Iowa auto insurance.

Workers’ Compensation Insurance

Iowa requires most businesses to have workers’ compensation insurance, but there are some exceptions. The Iowa Division of Workers’ Compensation Commission details these exceptions in its guide:

1. Domestic and casual employees who earn less than $1,500 from their employer during the 12 consecutive months prior to the injury.
2. Agricultural employees whose employer has a cash payroll of less than $2,500 in the calendar year preceding the injury.
3. The spouse of the employer, parents, brothers, sisters, children and stepchildren of either the employer or the spouse of the employer, and the spouses of the brothers, sisters, children, and stepchildren of either the employer or the spouse of the employer.
4. Exchange labor in agricultural employment.
5. The president, vice president, secretary, and treasurer of a family farm corporation and their spouses, and the parents, brothers, sisters, children, stepchildren, and their spouses of either the officers or their spouses.
6. Police officers and fire fighters who are entitled to benefits under pension fund established by Iowa Code chapters 410 and 411.
7. A proprietor or partner who is actively engaged in the proprietor’s or partner’s business on a substantially full-time basis.
8. The president, vice president, secretary, and treasurer of a corporation (other than a family farm corporation), not to exceed four officers per corporation, may elect not to be covered under the workers’ compensation law. In order for the rejection of coverage to be valid, a REJECTION OF WORKERS’ COMPENSATION OR EMPLOYER’S LIABILITY COVERAGE (a form available through the Workers’ Compensation Commissioner’s office) must be completed. (See Appendix O)
9. Employees who are entitled to benefits under any rule of liability or method of compensation, for employees, established by the Congress of the United States.
10. Members of a limited liability company.

Data Breach Insurance

Iowa passed its data breach notification law in 2008, which requires a business that stores data on consumer personal information to give notice to any consumer whose data has been breached. This statutory obligation to inform consumers makes it more likely that businesses will face legal action if they suffer a data breach, giving rise to uncertain contingent liabilities. A business can reduce the financial risk such liabilities pose by carrying data breach insurance. 

Security breach — notification requirements

Any person who owns or licenses computerized data that includes a consumer’s personal information that is used in the course of the person’s business, vocation, occupation, or volunteer activities and that was subject to a breach of security shall give notice of the breach of security following discovery of such breach of security, or receipt of notification … to any consumer whose personal information was included in the information that was breached.

Iowa Insurance Resources

Division of Workers’ Compensation Commission’s Guide to Workers’ Compensation Insurance
Iowa Motor Vehicle Financial Responsibility Statute
Iowa Insurance Division Automobile Insurance Information
Iowa Insurance Division

General Liability Insurance

The vast majority of Iowa companies purchase general liability insurance from an insurance company even though it is not legally required. This type of business liability insurance covers third-party bodily injury, third-party property damage, advertising liability, libel, slander, copyright issue, and other common claims faced by companies across various industries. 

General liability insurance is one of the most important types of business insurance your company can purchase.

Business Owner’s Policy

A business owner’s policy (BOP) is an affordable way to bundle business insurance coverages. This type of policy includes commercial general liability insurance with commercial business property insurance. Many small business owners with a physical business space opt for this coverage.

Commercial Auto Insurance

You need to carry commercial auto insurance if your company uses vehicles to transport people or goods. This type of insurance is very similar to personal auto insurance and covers liability, medical costs, collisions, and uninsured/underinsured motorists. A commercial auto policy also covers vehicles rented or owned by your company and employees who use their own vehicles for company business.

Workers’ Compensation Insurance

Iowa requires most businesses with one or more employees to carry workers’ compensation insurance. Taking out workers' compensation insurance puts a limit on the amount and type of compensation that an injured employee may receive. The limits are set by law.

Employee Health/Life/Disability Insurance

Companies that provide health, life, and/or disability insurance as a fringe benefit will need appropriate Iowa insurance. Under the Affordable Care Act, firms with more than 50 full-time employees must offer health insurance or pay an expensive penalty.

Professional Liability Insurance

Professional liability insurance covers financial risks to attorneys, accountants, and other people who provide professional services or expertise. Professional liability coverage varies depending on the industry but usually includes negligence, legal defense, slander or libel, and copyright and trademark disputes. 

Professional liability insurance includes errors and omissions (E&O) insurance.

Data Breach Insurance

If your company hosts customers’ personal information on its servers and those servers are hacked, lawsuits and damages can result. Data breach insurance protects you in these cases. 

Cyber Liability Insurance

Similar to but more comprehensive than data breach insurance, cyber liability insurance may pay for legal expenses related to a data breach or set up a call center for individuals affected by a breach. It also may pay for active protection against cyberattacks.

Commercial Crime Insurance

Crimes like extortion, forgery, burglary, computer fraud, and embezzlement are covered by commercial crime insurance. Situations in which this type of insurance is particularly useful include dishonest or libelous acts by employees.

Fiduciary Liability Insurance

Fiduciaries, who are legally required to act in plan participants’ best interests rather than the company’s when choosing advisors and investments, should consider this type of insurance coverage. It covers them if they are sued for allegedly providing negligent investment advice or administering plans or benefits incorrectly. 

Third parties like out-of-company consultants and benefit plan administrators are usually not protected.

Directors and Officers Insurance

Any company with directors and officers should consider directors and officers (D&O) insurance coverage, a type of liability insurance that reimburses directors and officers for claims made against them regarding harm allegedly caused by their management decisions.

Executive Risk Coverage

Executive risk insurance is business liability insurance that provides coverage for fraud, D&O, employment practices, initial public offerings, pension funds, extortion, and professional negligence.