If your Iowa corporation, whether a C-corp or an S-corp, has employees, you need workers' compensation from the first one. Unlike some entities, your corporate officers are counted as employees by default, so they are on the policy too, though up to four officers per corporation can formally reject coverage.
Who this is for: owners and officers of an Iowa corporation who want to know who has to be covered and who can opt out.
The short version
- Employees must be covered from the first one, under Iowa Code section 87.1.
- Corporate officers are counted as employees by default in Iowa, so they are on the policy unless they reject.
- Up to four officers per corporation, typically the president, vice president, secretary, and treasurer, can reject coverage in writing.
- Directors are not employees just for being directors, unless they also work as employees.
- An officer's rejection cannot be forced on anyone as a condition of employment.
Officers are in by default
Iowa's definition of employee specifically includes a corporate executive officer who is elected or appointed under the corporation's charter and bylaws. That is the opposite of the sole proprietor and LLC rules, where owners are out unless they elect in. So in a corporation, both your regular employees and your officers start out covered. To take an officer off, that officer signs the state's rejection form, and if the corporation has no policy in force, the signed rejection has to be witnessed by two people who are not involved and filed with the state.
| Role | On the policy by default? | Can they opt out? |
|---|---|---|
| Regular employee | Yes, must be covered | No |
| Executive officer (president, vice president, secretary, treasurer) | Yes, counted as an employee | Yes, up to four officers per corporation may reject in writing |
| Director who does no other work | No, a director alone is not an employee | Not applicable |
| Officer who also works a regular job in the company | Yes | Only through the officer rejection, up to the four-officer limit |
Should an officer reject?
Rejecting trims a bit of premium because the officer's pay comes off the basis the price is figured on. The cost is that a rejected officer who gets hurt on the job has no workers' comp for that injury. Owner-officers who are hands-on in the work often stay covered for that reason, while a purely administrative officer with low injury risk is more likely to reject. Whatever you choose, the regular employees stay covered no matter what.
An Ames example
Illustrative, not a quote. An Ames manufacturing company is an S-corp with a president and a treasurer who are the two owners, plus six shop employees. The six employees must be covered from the first one. The two owner-officers are covered by default; the treasurer, who only handles the books, signs a rejection to come off, while the president, who works on the floor, stays on. When a customer's contract asks for proof of workers' comp, the company already has a certificate ready. See our workers comp for manufacturers page.
Real questions Iowa owners ask
Does my Iowa corporation need workers' comp?
Yes, if it has employees. Coverage is required from the first employee, and in a corporation the officers are counted as employees by default, so they are on the policy too unless they reject.
Are corporate officers covered by default in Iowa?
Yes. Iowa's definition of employee includes an executive officer of the corporation. That is the reverse of the sole proprietor and LLC rules, where owners are out unless they elect in.
Can an officer opt out of coverage?
Yes, within limits. Up to four officers per corporation, usually the president, vice president, secretary, and treasurer, can reject coverage by signing the state's rejection form.
Are directors counted as employees?
Not just for being directors. A director is not an employee unless the person also works as an employee of the corporation. Then the officer rejection rules apply.
What if we have more than four officers who want out?
Iowa caps the rejection at four officers per corporation. Any officers beyond that limit, and all regular employees, stay covered.
Can we require an employee to reject coverage?
No. A rejection cannot be forced on anyone as a condition of employment. It has to be a knowing, voluntary choice by the officer, and regular employees cannot be waived out at all.
Why Iowa owners choose Morrow
- We shop the right market for you. In Iowa you buy workers' comp on the open market from any private carrier approved by the Iowa Insurance Commissioner, because Iowa has no state fund; if no carrier will take you, the state's plan of last resort is the guaranteed fallback, so we can shop your rate freely and still keep a backstop for hard-to-place work.
- We catch pricing mistakes. Your price depends heavily on the category your work falls into for pricing (the class code). Put people in the wrong category and you overpay for years. We review your payroll and classifications before you buy.
- Proof of coverage, fast. Need a certificate (proof of coverage) for a general contractor or a landlord before Monday? We turn those around the same business day for most carriers.
- We help lower the score that drives your price. Insurers give you a score based on your past claims that raises or lowers your cost (the experience modification rate). We review it each year, flag errors, and connect you with return-to-work and safety resources that bring it down.
- Real people when a claim happens. When someone gets hurt, we stay involved through the life of the claim, not just at renewal.
Related Iowa guides
Every Iowa business is set up a little differently. These companion guides answer the same question for other situations, plus the national explainers behind the terms used here.
- Business insurance in Iowa (start here)
- Workers comp: the owner's overview
- I own an LLC: do I need workers comp?
- I'm a sole proprietor: do I need workers comp?
- We're a partnership: do we need workers comp?
- We're a nonprofit: do we need workers comp?
- My workers are 1099: do I still need it?
- Only part-time or seasonal staff: do I need it?
- I only employ family: do I need workers comp?
- Remote or out-of-state staff: do I need coverage?
- What happens if I don't carry workers comp?
- How much does workers comp cost?
- How do I get workers comp (even if turned down)?
- What insurance do I need for a contractor license?
- Workers compensation insurance, explained
- What workers comp costs (national guide)
- Workers compensation insurance, explained
- Hiring your first employee: what changes
- Iowa manufacturer workers comp
This guide is general information, not legal advice. Iowa rules and penalty amounts can change, so verify current requirements with the Iowa Division of Workers' Compensation or a licensed advisor before you rely on them. Last updated: July 2026.