Business insurance is an obvious choice for most businesses in any state, including Iowa. This article has a comprehensive overview of business insurance in Iowa, including the types of coverage available, legal requirements, and factors to consider when choosing insurance coverage.

Businesses we insure in Iowa:

• Architecture & Engineering
• Beauty & Barber Shops
• Commercial Property Management and Maintenance
• Consulting firms
• Manufacturers
• Healthcare facilities and practitioners
• Distributors
• Marketing firms
• Property
• Retail
• Contractors

Iowa is affectionately called The Hawkeye State. With 273,623 small businesses, accounting for 99.3% of all companies, Iowa employs 644,100 (46.6 %) workers. The majority of employees in Iowa work for small businesses which employ less than 500 people.

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Types of Business Insurance in Iowa

Here, we have covered insurance policies in the state of Iowa. Our agents are in touch with countless businesses across the state of Iowa. With first-hand knowledge of the Iowa market, we hope to provide you with a summary of these insurance policies and how you can compare them with others.

Legally Mandatory Insurance

In Iowa, certain types of business insurance are legally required. These include workers’ compensation insurance and, for business vehicles, commercial auto insurance. We shall enumerate these two major requirements.

Workers’ Compensation: Iowa

Iowa requires any business with one employee, part time or full time, to purchase a workers’ compensation policy. This policy covers medical treatment costs and pays lost wages when an employee is unable to work due to an injury or occupational illness developed from the job. As in all states, the state mandated death benefits will be paid if an employee dies while on the job or from a work-related injury or disease.

Iowa Department of Insurance provides public access to check to see if an employer has workers’ compensation coverage. An employer can get a workers' compensation policy from a private insurance company or choose to be self-insured by fulfilling specific requirements set by the Iowa Insurance Commissioner. In Iowa, a workers' comp claim can cover any health condition caused by employment, not just those from physical labor. Employees who suffer from conditions such as a loss of hearing caused by their work environment are compensable.

General Liability Insurance Iowa

Generally, small business insurance have General Liability Insurance coverage as part of their insurance program. This is a foundational coverage for any business in Iowa. General liability insurance in Iowa helps businesses for claims of bodily injury or property damage caused by the business or its employees while performing their work, A voluntary medical payment coverage can be included to handle minor injuries without having to provide the business was negligent. Coverage for slander, libel, and advertising injury is typically part of the general liability policy as well.

For example, we can take the example of a pressure-washing company based in Des Moines that provides high-rise window cleaning. If an employee breaks a window during the cleaning process, the company’s general liability insurance will respond to the claim for the window repair, less the company’s general liability deductible amount.

All Iowa businesses stand to benefit from this policy. Most commercial building leases require this insurance to be able to lease space.

Cleaning and construction companies such as these in Iowa can also choose to add tools and equipment insurance, a type of Inland Marine coverage for mobile assets. This coverage can help pay for the replacement of equipment or tools if they are damaged by a covered peril or stolen.

Professional Liability Insurance IOWA (Errors & Omissions):

Everyone is susceptible to making mistakes, even the most seasoned professionals. Human error is an unavoidable part of any business, irrespective of one’s level of professionalism, training, or experience. Although a professional might not have made any direct errors, when the butterfly effect of a minor mistake could be damaging. This insurance does not cover bodily injury or property damage, instead, it is designed for those professionals (excluding the medical field) whose actions cause a financial loss to others.

For instance, a minor oversight by a new employee or a proofreading error could lead to financial repercussions such as an architect whose mistake requires part of the building to be torn out and rebuilt. The cascading effects can lead to your client initiating legal action in the form of a lawsuit against your company. The scope of your general liability insurance is typically limited to physical bodily injury, property damage, or advertising injuries. All general liability policies exclude professional liability and financial losses.

Here is where our professional liability insurance in Iowa comes into play. This type of policy provides specialized liability protection covering losses that general business insurance does not, addressing negligent acts, errors, or omissions that could financially harm a client.

E&O insurance is helpful and critical for a wide range of professionals involved in medical fields, legal cases, accounting, architecture, engineering, event planning, printing, and advertising.

The coverage typically extends to the business owner, all employees (whether salaried or hourly), and subcontractors. It can be customized to meet the unique needs of various industries. E&O Insurance can rapidly respond to claims, which is crucial when dealing with time-sensitive issues.

Commercial Property Insurance IOWA:

Commercial property insurance property for the damage or loss by covered perils such as fire, tornado, or theft. Often referred to as business property insurance, this coverage is packaged with general liability and business interruption insurance in a Business owner’s Policy (BOP).

The typical cost of commercial property insurance is approximately $67 per month or around $800 annually. The premium largely depends on the value of the insured property and assets, meaning a home office will incur a lower cost than a standalone office building and its contents. Additional factors influencing the price include the location’s vulnerability to natural disasters, the year built, the construction materials of the building, the proximity to emergency services, and the business’s industry type, which could range from low-risk offices to high-traffic retail spaces.

Policyholders must choose between a “named perils” policy, covering only the events listed in the policy, or a“special form” policy, offering broader coverage with specific exclusions like flood or earthquake damage. Floods and earthquakes are usually purchased separately from a commercial property policy.

While not mandatory, commercial property insurance is essential for any small business owner who rents or owns a physical space, holds inventory, relies on tools and equipment, or maintains important business records and documents. It is like a financial safety net, ensuring recovery from physical damage without out-of-pocket expenses, which could be financially devastating.

Business Interruption Insurance IOWA:

This insurance is beneficial for firms with a requirement to operate from a physical location, such as retail stores or manufacturing facilities. It offers a financial safety net when your business must temporarily close due to a covered loss to the building. During the repair period, often referred to as the restoration period, this insurance helps a business meet its ongoing financial obligations.

These expenses include:

• Taxes and insurance
• Employee Payrolls.
• Pending loan, mortgage, rent, and lease payments during the shutdown.
• Payables-suppliers
• Other Expenses

Business owners can also opt for contingent business interruption insurance or dependent property business interruption insurance for the shutdown of a critical supplier or business partner. So, for example, if a supplier’s facility suffers a fire, this insurance could cover the resulting financial impact on your business.

Unexpected events beyond routine costs can also be covered. You can opt for Extra expense insurance, which is added to your business interruption policy. This helps cover costs beyond the everyday. This coverage is vital for handling emergencies timely and effectively.

Civil authority coverage is a part of business interruption insurance that comes into play when a government entity orders a shutdown, typically due to physical damage to a neighboring property. This coverage usually lasts up to two weeks, making it crucial to understand its particulars.

But there’s more. Suppose your business might need to close not due to direct damage but because essential services like electricity, gas, or water are cut off. In that case, off-premises utility services coverage can help you with your business expenses during such a shutdown. This coverage might also address direct damages from a utility outage. Depending on where your business is located, this coverage can be cost-prohibitive.

Cyber Liability Insurance IOWA:

Cyber insurance protects your business from liabilities arising from a data breach. When sensitive customer information including Social Security numbers, credit card details, account numbers, driver’s licenses, and medical records are hacked, Cyber Liability insurance helps cover:

• Legal fees and expenses
• Restoring the identities of affected customers
• Notifying customers about a data breach
• Repairing damaged computer systems
• Recovering compromised data

Coverage varies significantly between insurers and policies, so it’s important to compare them carefully.

A good cyber insurance policy should be reviewed for:

• Limits and deductibles
• Accuracy of business details
• Coverage scope
• Specific Exclusions

Commercial Auto Insurance:

In Iowa, all vehicles owned by a business (or not) must have auto insurance. This insurance helps pay for any damages for which you are liable from vehicle accidents that happen in a business vehicle.

Auto insurance requirements in Iowa:

• $20,000 bodily injury liability per person
• $40,000 bodily injury liability per accident,
• $15,000 property damage liability per accident.

Trucking companies might need additional coverage to comply with regulations.

In Iowa, it's mandatory for all drivers to have a minimum bodily injury liability limit of $40,000 to cover medical expenses if the driver is at-fault for causing an injury to someone else in an accident. Personal auto insurance typically does not cover accidents involving business-owned vehicles. Therefore, having commercial auto insurance is crucial for any Iowa businesses that own company vehicles.

For businesses where employees drive as part of their job duties, a basic commercial auto insurance policy might not be sufficient. It's advisable to add hired and non-owned auto liability to your commercial auto insurance plan.

Costs Factors to Consider When Choosing Business Insurance in IOWA

In Iowa, the average cost of small business insurance is around $45 per month, but this can vary significantly depending on the nature of your business. The total insurance cost is influenced by several factors:

Industry risks: If your business operates in a high-risk industry, expect higher insurance premiums. For example, construction businesses in Iowa typically spend about $63 per month on insurance, whereas retail businesses spend around $25 per month.

Coverage levels and policy limits: Generally, opting for the minimum required coverage or lower policy limits can reduce your monthly premiums. However, this might result in minimal savings in the event of a costly accident, as you could end up paying more out-of-pocket to settle claims.

Payroll of employees: Like in other states, the cost of worker’s compensation insurance for small businesses in Iowa is determined by employee payroll. Accurately keeping track of employee duties and payroll will help you better estimate your insurance costs. Worker’s compensation is audited for the accuracy of payroll when the policy ends.

Deductibles: Policies with higher deductibles typically have lower premium amounts, but you must ensure you can afford the deductible if you need to make a claim.

Reputation & Financial Strength: Choose an insurance provider known for good customer service and financial stability. AM Best provides financial ratings of insurance companies.

Local Regulations & Laws: Be aware of Iowa’s laws as well as the local city and county for the type and amount of insurance you may need. As a business owner, you should also be aware that violation of mandatory insurance requirements will result in fines and other penalties.

With rising insurance costs in most US states, it makes sense to understand the various factors that influence insurance costs.

Get a Quote For Iowa Business Insurance

If you need a quote for your Iowa business, please visit us at InsuranceAdvisor.com. Choose your state, then choose from General Liability, Commercial Property, Business Auto, and Workers’ Compensation insurance to answer the application questions. Once we receive your request, we will provide you with a quote as quickly as possible.

Selecting the right business insurance in Iowa involves understanding your risks, knowing the legal requirements, and carefully assessing different insurance products. By ensuring essential coverage, you can protect your business from significant financial setbacks and secure its long-term success. It’s advisable to consult our licensed insurance agents at InsuranceAdvisor.com who understand the insurance needs of businesses in Iowa to tailor coverage that suits your requirements.

Why Choose Insurance Advisor for Commercial Insurance in Iowa?

We are licensed to provide insurance in Iowa and can provide quotes with different insurance carriers. You can request quotes for your business from the comfort of your home, office, or anywhere by visiting us at InsuranceAdvisor.com.  Once you create an account, your business information is stored, and you can come back at any time to request quotes for other lines of insurance, get a certificate of insurance, and update your information. 

Frequently Asked Questions (FAQ) about Iowa Business Insurance