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Workers' Compensation for Iowa Businesses

What are the legal requirements for workers’ comp in Iowa?

Iowa employees are covered by the Iowa workers’ compensation law under most employment relationships. Correspondingly, most business owners required by law to purchase workers’ compensation liability insurance. A procedure exists that permits employers to apply to the Iowa Insurance Commissioner to become certified to self-insured rather than purchase insurance.

Criminal and civil penalties can be imposed on Iowa business owners who violate the mandatory insurance law. Employers who operate without workers’ comp insurance illegally lose the exclusive remedy protection of the workers’ compensation law and are liable to the employee for the full measure of damages available under tort law if an injured employee sues the employer in court.

Sole proprietors, partners in a partnership, and members of a limited liability company that have a status other than of an employee and are not covered by Iowa workers’ compensation law. However, they may, elect to be covered by purchasing insurance that expressly covers them. Persons who are bona fide independent contractors are not employees. However, a contract that designates a person to be an independent contractor does not make the person an independent contractor if the person functions as an employee. 85.18 IA Code.

Iowa law contains a number of exemptions that make specified employees and their employers exempt from workers’ compensation coverage (85.1 IA Code). Persons eligible to receive compensation under federal law are exempt. In general, limited exemptions exist for persons employed in agriculture or by a relative. Limited exemptions exist when the employment is casual and is not performed for purposes of the employer’s trade or business or if the employee’s services are performed in or about the employer’s dwelling. Some of the exemptions apply only if the employee’s earnings from the employer are less than $1,500 annually. Business owners may elect to cover some classes of exempt employees by purchasing an insurance policy the specifically includes those employees. Specific guidance on exemptions and electing coverage can be obtained from a Workers’ Compensation Compliance Administrator.

What types of injuries are covered with workers’ comp insurance in Iowa?

Iowa state law determines what types of injuries are covered by workers’ comp insurance, but there are general guidelines that can help you understand what typically qualifies for a workers’ comp claim.

These include:

  • No intentional self-harm, harm that results from drug or alcohol use, or fighting. 
  • Must fall within the “course and scope” of employment. If you get into a fender bender on your way home from work after you’ve clocked out for the day, that’s unlikely to qualify.  
  • Long-term occupational injuries, including back strain from repetitive motion. When you think of work-related injuries, you probably think of one-time events — but damage can occur over a long period of time. As long as the injury or illness is clearly associated with the employee’s work responsibilities, it may be eligible. 

Iowa Statistics*

*2017 business stats provided by the Bureau of Labor Statistics

646,525

number of Iowa residents employed by small businesses


38,100

number of workplace injuries


15.1 billion

annual bushels of corn produced


25%

percentage energy from wind power


200 million

gallons of Blue Bunny ice cream produced annually


Iowa Businesses We Cover with Workers' Comp Insurance

Food & Beverage

Bars, Bistros, Cafeterias/Buffets, Candy Stores, Caterers, Coffee Shops, Doughnut Shops, Fast Casual, Fast Food, Fine Dining, Health Supplement Stores, Juice Shops, Tea Houses, Taverns and Nightclubs

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Tech Services

Data Processing, Ecommerce, Hosting, Graphic Design, Network Installation/Repair, Office Machine Installation/Repair, Programming, Strategy & Management Consulting Services, and Software/Web Development (includes SOLOpreneuers!)

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Legal Services

Athlete/Actor/Entertainer Agents, Court Reporters, Lawyers & Attorneys at Law, Notaries and Transcription

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General Retail

Bakeries, Beer/Wine/Liquor Stores, Butcher/Meat Markets, Convenience Stores/Gas Stations, Discount Stores, Fish, Seafood, Fruit & Vegetable Markets, Grocery Stores, Laundromats, Pet Stores, Pharmacies/Drug Stores, Specialty Food Stores

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Educational Services

Computer Training, Cosmetology/Barber Schools, Exam Preparation/Tutoring, Fine Art Schools, Language Schools, Libraries/Archives, Management Training, Professional Training, & Translation/Interpretation Services

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Manufacturing

Microbreweries (less than 15,000 barrels produced per year) & Wine Making (no growing or production of grapes/fruit)

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Personal Services

Barber Shops/Salons, Cemeteries/Mausoleums, Crematoriums, Funeral Homes, Interior Design, Pet Kennels/Groomers, Photography/Photofinishing, Gyms, Nail Salons, Self-Storage, Tanning Salons, Tattoo/Piercing, and Wedding/Event Planners

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Clothing Retail

Bridal Stores, Clothing Stores, Dry Cleaners, Formal Wear/Costume Rentals, Luggage & Leather Goods Stores, Shoe Retail/Repair, and Tailor Shops

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Personal Product Retail

Art Galleries/Stores, Auto Parts, Beauty/Cosmetics, Bike Stores, Bookstores, Camera/Photo Supplies, Cell Phone Retail/Repair, Computer Stores, Jewelry Stores, Musical Instruments, Sporting Goods , Tobacco/Vaping & Video Games

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Medical Professions

Blood Banks, Dental Labs, Dentists/Orthodontists, GP/Medical Specialists, Kidney Dialysis Centers, Medical Diagnostics & Testing, and Veterinarians

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Architecture & Engineering Services

Architects & Drafting, Engineering, Surveyors, & Window Treatment Stores (we do not cover construction contractors or trucking companies)

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Financial Services

Accounting, Auditors, Banks/Credit Unions, Bookkeeping, Collection Agencies, Financial Advisors/Trust Companies, Mortgage & Loan Brokers, Payroll Services, Tax Preparation, Title & Title Insurance

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Scientific Services

Scientific Research & Development/Consulting, Technical Consulting, & Environmental Consulting

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Office, Home, & Garden

Hearing Aid Stores, Hobby/Craft/Art Stores, Gift/Novelty Stores, Florists, Floor Covering Stores, Mailing/Packaging Stores, Models/Toy/Games, Office Supplies, Optical Stores, Paint/Wallpaper Stores, Perfume Stores, Plumbing & Taxidermists

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Therapeutic Services

Acupuncture, Chiropractors, Mental Health Practitioners, and Physical & Occupational Therapy

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Explore commonly asked questions about business type, industry and state.

To put it simply, your business is covered. Just like that.In most cases, all of your employees are covered by workers' compensation insurance, including subcontractors (given they provide you a Certificate of Insurance). However, a Certificate of Insurance (COI) isn't a guarantee of coverage (policy may have cancelled since issuance). You should request periodic COIs throughout the contract.
Workers' compensation insurance provides all state required benefits, including reasonable and necessary medical treatment and wage replacement, for employees injured in the course and scope of employment.
In most states, it’s required for small business owners to obtain workers’ compensation coverage. In the event that an employee is injured in the course and scope of your employment, workers' compensation insurance protects you from costly lawsuits and provides state required compensation for the employee, including lost wages and medical expenses.
The estimated premium is based on estimated payroll (at the beginning of the policy). The final premium is based on actual payroll (at the end of the policy) for the policy period (usually 12 months). In the event your payroll changes, we'll work with you on adjusting your policy.
Yes, the workers' compensation policy covers all of your employees. Significant changes to your payroll should be reported to Cerity. This will help mitigate having a large additional premium due at the end of your policy period.
Cerity is a data-services company that is a licensed insurance producer that provides comprehensive workers' compensation insurance for American businesses. In less than five minutes, a small business owner can have a quote and can be protected as soon as the next day. In other words, your business is covered. Just like that. We are backed by Employers Holdings, Inc., a workers' comp industry veteran of over 100 years, EHI is reimagining how to purchase workers compensation insurance.
You do not need any documents to apply - we told you it was simple! All you need to obtain a quote is tell us a few quick things about your business and we should be able to get you a quote.