Iowa Commercial Liability Insurance Guide
If you own a small business in the Iowa , this information will help you understand
Iowa Commercial Liability insurance and protect your business and your personal assets
from legal claims and settlements that can spell financial ruin. Whether you work in
Des Moines, Cedar Rapids, Davenport, Sioux City, Davenport or anywhere else in the
Hawkeye State having sufficient
is an important part of any small business plan in Iowa.
Fast Facts About IA Small Business
A small business is defined as any company with fewer than 500 employees.
Small business is vital to Iowa’s economic well-being, accounting for more
than 97% of all state employers. Of Iowa’s 261,262 small businesses in 2008
(the latest data available), 63,234 were small employers, accounting for more
than 48% of the state’s private-sector jobs. Another 198,028 were one-person
operations with no employees.
Source: SBA Iowa Small Business Profile 2011.
About Commercial Liability Insurance for IA Businesses
Commercial liability insurance (also called business liability insurance
and commercial general liability insurance) protects your Iowa business from
financial loss resulting from claims of injury or damage cause to others by
you or your employees. A policy typically covers:
- Bodily Injury – physical damage to a person other than an employee at
your place of business and injuries caused by you or an employee at a client’s
home or work place.
- Personal Injury – libel, slander, copyright infringement, invasion of
property or privacy, wrongful eviction, false arrest and similar acts that
cause damage to a person’s reputation or rights.
- Property Damage – damage done to another person’s property by you or
an employee in the course of conducting your business.
- Advertising Injury – losses caused by your advertising
- Legal Defense and Judgments – costs to defend against real and frivolous suits and judgments up to the limit of your coverage. Note this generally does not include punitive damages for negligence or willful misconduct.
Iowa Minimum Business Insurance Requirements
Commercial Liability Insurance is not mandatory for businesses operating
in Iowa. Iowa is a modified comparative negligence fault state. The plaintiff
can be up to 50% at fault and still sue for damages. The Iowa courts have
struck down caps on personal injury awards in Iowa. The statute of limitations
for general personal injury and products liability is 2 years. Accidents and
lawsuits (legitimate and frivolous) do happen in Iowa. If you own property or
other valuable assets you would be wise to invest in sufficient commercial general liability coverage for your Iowa small businesses.
How Much Iowa Commercial Liability Insurance Should You Carry?
Each situation is unique, but as a general guideline, the type of Iowa
business you operate or products you manufacture should determine how much
Iowa commercial general liability insurance you need. A good rule of thumb
for most small businesses is between $500,000 and $1 million. However, if
yours is a high-risk business such as the building trades or has a high
volume of interaction with the public such as a restaurant or retail business,
you should consider increasing your coverage. Note that if you operate out of
your home, your homeowner’s or renter’s insurance has limited coverage for
business liability and loss.
How Are Premium Costs Assessed
Iowa commercial liability insurance premiums are based on a number of factors
including the types of service or products you provide, the number of people
you employ, how long you’ve been in business, and your claims history. Coverage
is typically capped at a specific dollar amount for your policy period.
Other Insurance to Consider for Your Iowa Small Business
- Iowa requires that anyone who employs one or more persons,
whether full or part time, carry workers compensation insurance.
Sole proprietors with no employees are not required to carry workers
compensation. Other exemptions may apply. See the Iowa Work Force for
more information. iowaworkforce.org
- Iowa requires that all drivers carry minimum automobile insurance.
If you use your car or truck for business, it is recommended that you
purchase a commercial vehicle policy.
- Employee Disability Insurance
- BOP - Business Owner's Policy
- E&O - Errors & Omissions
- EPLI - Employment Practices Liability Insurance
- Professional Liability
- Product Liability
- Commercial Property Insurance
Regulating Agency and References
Iowa Insurance Division
This agency is responsible for regulating vehicle insurance policies sold in
Iowa. For more information, visit their website at
Iowa Small Business Administration
The SBA is an independent agency of the federal government created to aid, counsel, assist and protect the interests of small business concerns and maintains a District Office in Des Moines. Get the link to the Iowa SBA at
National Association of Insurance Commissioners (NAIC)
This is an organization of insurance regulators from the 50 states, District of Columbia and the five U.S. territories. NAIC provides a forum for the development of uniform policies when appropriate. It also offers an online form for filing complaints, reporting suspected insurance fraud and downloading key financial information about insurance carriers at
Insurance Information Institute (III)
This organization’s mission is to improve public understanding of insurance – what it is and how it works. Visit III at
Get competitive quotes for commercial liability insurance and all your business insurance needs at
Related General Liability and Other Business Insurance Articles
Premises Liability Insurance Basics for Small Business
What’s the Difference Between Workers Compensation and Employee Disability Insurance?
Does Your Professional Liability Insurance Cover Social Media Risks?
How to Shop for Commercial Fleet Insurance
Last Updated: 01/25/2013