Iowa Business Insurance

Thinking of starting a small business in Iowa? You’re in good company. Small businesses make up more than 99% of all Iowa businesses, which means entrepreneurs like you are essential to the local economy.

Before you can start contributing to your community, you need to take care of a few details. Iowa business insurance is a consideration for many business owners, but the topic can seem confusing at first. Whether you’re trying to find out which requirements apply to you before opening your business or are looking to protect your expanding company, we’ve got you covered.

Iowa Business Insurance: The Basics

It’s best to have a basic understanding of Iowa business insurance before you dig into the types of coverage and which rules apply to you. By understanding the purpose of coverage, you can make sense of state rules and considerations for your specific business type.

In general, business insurance can help you cover the costs of accidents and lawsuits. You’ll start by choosing a policy that fits your needs and paying a monthly or annual premium. If you have health, auto, or home insurance, this concept may be familiar.

Then you might be able to use your policy to pay for expenses related to customer slip-and-fall accidents, negligence claims, and more. Sometimes states will require industries that they deem risky or accident-prone to maintain a business insurance policy. Other times, the decision to get coverage is left up to the business owner.

There are three main types of Iowa business insurance, and they each typically cover a unique set of scenarios.

General liability insurance in Iowa

General liability insurance in Iowa is coverage that can help a wide range of business owners.

General liability insurance typically covers:

• Third-party property damage, such as to a client or vendor
• Bodily injury
• Medical expenses
• Property damage or injury due to your product or completed service
• And more

While you hope you never have an accident in your business, small mishaps can happen to even the most seasoned professionals.

The types of claims typically covered by Iowa general liability insurance can be surprisingly expensive. On average, customer slip-and-fall claims reach $20,000, and customer injury or damage could set you back $30,000.

For reference, here are a few scenarios where having a business insurance policy could mean the difference between bouncing back from an accident or filing for bankruptcy.

• A carpenter heads home for the day and instructs the homeowner to not walk on the deck stairs, which are partially finished. The homeowner thinks the stairs look fine and decides to take a peek. Unfortunately, a board is loose, and the homeowner slips and breaks their arm.

On top of the medical bills they racked up, the homeowner missed a week of work. Now, they’re suing the carpenter for their medical bills and lost wages. Without insurance, the carpenter would have to pay up, even if that meant potentially taking out a loan.

• A painter is helping a homeowner to prep their living room to sell the house. A crewmember inadvertently spins around a little too quickly when another worker calls out to them and knocks over a paint tray and splashes paint onto a nearby rug.

The homeowner demands that the painter pays to replace the family’s heirloom rug. Fortunately, the uninsured painter has enough money to cover the replacement cost of the rug, but has to put off upgrading the new equipment they wanted to purchase.

• A new lawn care company accidentally runs over a rock in the yard with a mower, sending the rock flying through the home’s front window. On top of dealing with the upset homeowner, without insurance, the company owner has to use personal savings to pay for the window replacement, since they don’t have any business savings.

If these companies had general liability insurance in Iowa, they could have filed claims to potentially have their policies pay for the damage or replacement - up to their policy limit.

Unless you have tens of thousands of dollars in your business bank account to pay for accidents, having general liability insurance could help save you from shelling out the money on your own.

We know what question is on your mind, though. "Does my business need general liability insurance in Iowa?" It might.

Depending on licensing requirements, some businesses may have to submit a Certificate of Insurance (COI) before they can legally operate. It’s a good idea to check the Iowa Secretary of State website to learn more about licensing and insurance requirements in your industry. Your county or city also may have business license requirements, so do your due diligence.

A few businesses with Iowa business insurance rules include:

• Alarm system contractors need at least $1 million per occurrence, $1 million for property damage and $500K per person of general liability insurance.
• Commercial pesticide applicators need liability insurance with at least $100,000 property damage and public liability, each separately, OR liability insurance with limits of $100,000 per occurrence and $300,000 annual aggregate.or.

These requirements can change so it is best to double check your state and trade’s current requirements.

You don’t have to wait for the state to tell you to get insurance, though. Simply Business works with over 80 types of businesses that insure those businesses, and also have a guide to getting licensed and insured as a contractor in Iowa.

If you want to know if you could benefit from a general liability policy, call our licensed insurance agents at 855-563-0376 or get a free quote online in minutes.

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Even if you think your business is not accident-prone, having insurance could help you stand out.

Here are a few benefits of general liability insurance that have nothing to do with accidents:

• Insured businesses stand out among the competition. Gaining traction as a new business is tough, and anything that helps you stand out is worth investigating.

Showing your Certificate of Insurance on your website and other advertising can help gain trust with potential customers. It also sends a clear signal that you’re a responsible business owner and not a fly-by-night, which can be a concern in some industries.

• Securing funding or rental space could be easier for insured companies. Some lenders and landlords might want to see proof of insurance on an application. Even if coverage isn’t required, the extra level of protection could help you stand out as a sound investment.

• The best employees seek out reliable companies. Employees want to work for a business that is likely to stick around. Since having insurance could help you ride out the storm that may come after an accident, your coverage could help you attract top workers.

Professional liability insurance in Iowa

If you’re in the business of offering advice or counseling services, you might want to consider professional liability insurance in Iowa.

Professional liability insurance typically covers:

• Negligence or alleged negligence
• Claims involving slander and/or libel
• Legal defense costs
• Copyright infringement
• And more

Some industries and occupations with Iowa license requirements may also need to show proof of insurance when they apply for a license. So the type of work you do has an impact on whether or not you need coverage. For example, real estate brokers need to carry an Errors and Omissions policy, which is similar to professional liability. The Iowa Source Link site has a helpful guide to the various licensing agencies in the state.

There are plenty of businesses and situations where professional liability insurance could help.

Here are a few scenarios where business owners may be able to use their policy to help cover damages:

• A photographer had a long day editing photos before sending final shots to a client, taken at a boudoir session. Then, something awkward happened — the photographer realized they sent the photos to the wrong person.

The model found out their pictures were sent to someone else’s inbox, and they were furious. The client decided to sue the photographer for negligence. Now the uninsured business owner has to settle the lawsuit with their own finances.

• A real estate agent is about to submit an offer for a client when another homebuyer calls them in a panic. It takes only a few minutes to calm them down, then the agent gets back to submitting the offer.

Unfortunately, the real estate agent gets word that the sellers accepted an offer that came in while the agent was on the phone. When the agent tells the homebuyers the bad news, they’re extremely upset.

Since they feel the agent failed to live up to their promise to submit the offer ASAP, the potential buyers sue for negligence. Without insurance, the agent would likely have to pay for the claim, as well as legal fees, out of their pocket.

• An IT consultant suggests some best practices to their client, who is happy to oblige. All seems fine until a few months later when the client’s computer gets a virus. It turns out the consultant’s advice left a vulnerability in the firewall.

The client is upset about the revenue they lost while their computer was out for repairs and wants the consultant to pay up. The consultant doesn’t have insurance, so they have to use the money they were saving for a new computer to pay the client’s claim.

Professional liability insurance could also help you land more clients. If the status quo in the state is that your industry isn’t required to have coverage, then showing proof of your policy can set you apart.

If you’re willing to go above and beyond to look after your business, customers might feel you’ll look out for them too.

Iowa workers compensation insurance

Hiring your first employee is an exciting time for your business. It usually means you’ve generated so much demand that you can’t do it all by yourself or that you’re ready to take on more projects.

When you hire your first employee, you gain a new insurance responsibility. Most employers need to have an Iowa workers compensation insurance policy. This law applies to employers across every industry.

Workers compensation insurance kicks in when an employee is injured or becomes sick on the job. It can help cover:

• Lost wages
• Rehabilitation expenses
• Medical payments
• Death benefits

The average workers comp claim reported is $41,000, so having a policy is important for both the employer and the employee. The employee knows they’ll get the care they need, and the business ensures the workers comp coverage will likely be able to pay for it.

Other types of Iowa business insurance

The three types of Iowa business insurance covered so far apply to many businesses and scenarios. There may be items specific to your company that need extra coverage, though. Some other policies that may help you include:

• Home-based business insurance. If you run your business from your house, your homeowners insurance policy might not cover that space. A general liability insurance policy could exclude your home office. So, home-based business insurance coverage could help fill in that gap.

• Commercial auto insurance. All vehicles in Iowa need automobile insurance, but your personal policy might not cover commercial activities. Say you plan to use a car in your business. In that case, even if it’s just driving to appointments, you should talk to your auto insurance agent to make sure coverage extends to those scenarios.

• Business personal property. If the value of your business equipment and tools are more than you could afford to replace, you may want to consider getting a business personal property policy. This type of coverage could help you replace your damaged or stolen items.

Iowa Workers Compensation: What You Need to Know

Generally, you may want to consider getting an Iowa workers compensation policy when you hire your first employee. Even having just one part-time worker makes you an employer in the state of Iowa.

There are a few exceptions to what counts as an insurable employee, including:

• People who work in your home and make less than $1,500 a year
• Some agricultural workers
• Most other members of your corporation, such as an LLC
• Independent contractors

If you want to review Iowa workers comp laws more closely, you can view them here or on the Iowa Workforce Development site.

How Much Does Iowa Business Insurance Cost?

One of the first objections that probably comes to mind as you consider Iowa business insurance is the cost. How much should you expect to pay for coverage?

Well, the answer is about as straightforward as asking, “How much does a car cost?” Many variables go into both the price of a car or a business insurance policy. So the easiest way to figure out how much your Iowa business insurance will cost is to get a free custom quote.

Your ideal policy will align with your business, so you never have to pay for more coverage than you need. Generally, your policy and premium costs depend on:

• Where you live
• What type of services you offer
• Which plans you choose
• The size of your business

At Simply Business, general liability insurance quotes can start as low as $19.58 a month.* You also can compare plans from trusted insurers to find the coverage you're comfortable with. If you want to save money (don’t we all?), consider bundling your policies or opting for a higher deductible to start.

Keep in mind that your policy can grow with your business, so you may not necessarily need to buy the largest insurance plan right away.

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How Do I Get Iowa Business Insurance?

Let’s just state the obvious: Understanding business insurance can come with a lot of nuances. There’s no one-size-fits-all requirement that’s easy to prescribe. Understanding just a few key concepts can take you a long way in understanding your next steps, though.

• You may or may not have Iowa business insurance requirements, since these can vary based on your industry and business size. Going above and beyond to get coverage can help you build trust with potential customers, though, and we often recommend it.

• General liability insurance in Iowa is useful for many businesses. This type of policy could protect your business or personal finances if your business activities cause an accident or injury.

• If there’s even a slim chance an angry customer could claim that your work harmed them, you should consider professional liability insurance in Iowa.

You don’t have to actually do anything wrong to face a negligence claim.

• Hiring even one part-time employee could trigger a new insurance requirement for you: Iowa workers compensation insurance. There are some exceptions, but most employers should plan on getting this policy.

Here are our best tips for finding rules that apply to you and shopping for a policy.

• You can usually find insurance requirements for the type of work you do on business license applications. Read the Iowa Source Link page about additional licensing, and check out our guide to getting an Iowa business license.

• Use the Iowa Business License Search and list of licenses and permits to see if you need a business license.

• If you’ll be performing multiple services, make sure you understand insurance requirements and recommendations for all of them.

• Think about how your business will grow in the next year and whether that could impact insurance requirements.

• Be sure to check for local license or insurance requirements with your county clerk or city government.

• Talk to business owners in your area about which policies they have and recommend.

• If you’re shopping for insurance on the Simply Business platform, feel free to reach out to our licensed insurance agents at 855-563-0376 to answer any additional questions.

• Compare insurance quotes across providers to find the coverage and cost that you’re comfortable with.

Getting insured is a small step with a big impact

It takes only minutes to get Iowa business insurance. You can get free custom quotes by answering a few questions. If you’ve been putting this task off, why not take the first step today?

Making even a little progress today can make your future self happy. Not to mention that you’ll likely be grateful to have coverage if an accident occurs.

If you have questions or concerns, we have licensed (and friendly) agents at 855-563-0376 to talk to and help you through it all.

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*Monthly payment calculations (i) do not include initial premium down payment and (ii) may vary by state, insurance provider, and nature of your business. Averages based on January - March 2023 data of 10% of our total policies sold.

This content is intended to be used for informational purposes only. It is not intended to provide legal, tax, accounting, investment, or any other form of professional advice.