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June 9, 2025
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Iowa workers' compensation insurance: Your guide to requirements and getting a policy
If you’re an Iowa employer looking to protect both your business and your team, you’re in the right place. At Beyond, we provide the essential information you need to understand how workers’ compensation works and how to stay compliant.
In Iowa, workers’ compensation isn’t just a legal requirement – it’s a smart business move. If an employee suffers a job-related injury or illness, workers’ comp provides medical coverage and partial wage replacement while they recover.
For employers, this coverage offers vital legal protection by helping prevent lawsuits related to workplace accidents or health issues.
Most businesses in Iowa are legally required to provide workers’ comp to cover employees who get injured or sick due to work. This includes wage loss and medical benefits.
Certain categories of workers aren’t covered by default, including:
Independent contractors, LLC members, and business partners (unless they opt in with coverage).
Domestic and casual employees earning under $1,500 in the previous 12 months.
Agricultural employees whose employer’s annual cash payroll is below $2,500.
Family members of the employer (spouse, children, siblings, etc.).
Farm labor exchanged without payment.
Corporate officers of family farm corporations and their families.
Firefighters and police under Iowa pension systems (Chapters 410 & 411).
Sole proprietors and general partners working full time.
Up to four officers of a non-farm corporation may choose to opt out by filing the proper form with the Workers’ Compensation Commissioner.
Workers covered under federal laws or compensation systems.
If not automatically covered, these individuals may still purchase a workers’ comp policy that explicitly includes them.
Employers can secure coverage through a private insurance provider or apply for self-insured status by meeting the Iowa Insurance Division’s requirements.
Important: It’s illegal to deduct premium costs from an employee’s paycheck. Workers’ comp is a business expense, not a shared one.
If an employee is injured, they must notify the employer within 90 days of the incident. The clock starts when the worker becomes aware that the injury was caused by their job.
Once an employer knows about the injury, they must file a First Report of Injury (FROI) with the Iowa Division of Workers’ Compensation within four days if the injury results in:
More than 3 days of temporary disability
Permanent partial or total disability
Death
All incidents must be reported via Iowa’s electronic data exchange system.
Failing to provide required workers’ compensation insurance isn’t just risky – it’s criminal.
Knowingly operating without coverage is a Class D felony in Iowa, punishable by up to 5 years in prison and fines from $750 to $7,500.
Beyond legal penalties, businesses can also be held financially liable for damages or required to pay workers’ compensation benefits directly.
With a proper policy in place, Iowa employers protect not only their workers—but also themselves. Injured employees get the care and support they need, while business owners gain legal and financial peace of mind.
Stay compliant. Stay protected. Let Beyond help you navigate workers’ comp with confidence.
