As an employer, am I required to buy workers’ comp insurance?

On Behalf of | Jan 29, 2019 | Workers' Compensation Defense |

Between running the day-to-day operations of a profitable business and complying with various regulations, employers have heavy responsibilities. One responsibility that you must carefully handle is workers’ compensation. Workers’ compensation insurance is vital for both employers and workers, as it covers most injuries and illnesses incurred on the job.

For most employers in Iowa, it is also mandatory. Some employers, however, are exempt. If you do not know which category you fit in,

Who is exempt from buying workers’ comp insurance?

If you are a sole proprietor or a member of an LLC, the state of Iowa does not require you to have workers’ comp insurance. You may wish to purchase it, even if you are exempt. The monthly premium may be far less than the cost of medical care, lost wages and other damages for an employee who is injured on site.

Under state law, all other employers in Iowa must purchase this insurance or face civil penalties. However, you are exempt from providing it to certain employees, including:

  • Domestic or casual workers who made under $1,500 in the year before the injury
  • Agricultural workers on a cash payroll of less than $2,500 in the year before an injury
  • Agricultural exchange workers
  • Officers and family members of a family farm corporation

Iowa has a private market for workers’ compensation insurance. You can purchase coverage from any private insurer. Usually, you must purchase a separate policy, as general liability insurance does not cover employees’ injuries.

An inconvenience, but a necessity

Purchasing workers’ comp insurance can be a long, complex process. It adds stress to your already busy schedule. However, it is necessary for every qualifying business owner in Iowa. It also provides much-needed peace of mind. Once you have purchased insurance for your workers, you can rest assured that if they suffer an illness or injury on the job, your insurance has you covered.