Iowa Supreme Court Clarifies: “Any One Loss” in Business Income Coverage Is a Single, Aggregate Limit Across All Covered Locations When the Policy Selects an All-Locations Schedule

Introduction

In Heartland Co-Op v. Nationwide Agribusiness Insurance Company (Iowa Supreme Court, March 21, 2025), the court resolved a high-stakes dispute over the scope of business income (earnings) and extra expense limits in a commercial property program following the devastating 2020 derecho. The insured, Heartland Co-op, operated scores of locations across multiple states and sought to treat business interruption at each affected location as a separate “loss,” thereby stacking a $3 million limit per location. Nationwide treated the derecho as a single covered peril producing a single “loss” and applied a single $3 million aggregate limit across all covered locations.

The key issue was whether the policy’s phrase “for any one loss,” read with the policy’s Schedule of Coverages and location schedule, allowed per-location stacking of the earnings and extra expense limits, or capped recovery at a single, aggregate limit for the entire entity across “all covered locations.” The Iowa Supreme Court held the policy unambiguously provides for a single, aggregate limit—here, $3 million—for business income and extra expense resulting from one covered peril, when the policy’s selected schedule applies to “all covered locations” rather than “any one covered location.”

This decision offers a significant clarification for multi-location insureds and their insurers: when the Schedule of Coverages and policy definitions tie business income measurement to the named insured as an entity and the selected schedule applies to “all covered locations,” “any one loss” is measured and limited at the entity level, not per location. The court affirmed the district court and court of appeals.

Summary of the Opinion

The Iowa Supreme Court, per Justice McDonald, affirmed summary judgment for Nationwide. The court held that:

The policy unambiguously measures business income and extra expense at the entity level (the “Named Insured”) and caps payment at the limit shown in the policy’s selected Schedule of Coverages “for any one loss.”
Because the policy’s checked option referenced a location schedule that established an “all covered locations” limit for earnings and extra expense (with no per-location E&EE limits), the $3 million limit applied in the aggregate to Heartland’s loss from the derecho across all affected locations.
Heartland’s internal accounting and differing “periods of restoration” at various locations may inform the amount of loss but do not multiply the number of “losses.”
Premium evidence corroborated the interpretation: a $2,760 premium could not reasonably support the “substantially elevated risk” of potentially hundreds of millions in stacked per-location limits.
Steel Products Co. v. Millers National Insurance (Iowa 1973) did not control because it addressed how to measure the period of business interruption at a single location, not whether limits stack across multiple locations. If anything, Steel Products’ description of business interruption’s purpose (to protect the insured entity’s earnings) supported Nationwide’s view.
Heartland waived any argument that the derecho was multiple storms; the court proceeded on the basis that the derecho was one weather event, i.e., one covered peril.

Analysis

1) The Policy’s Text and Structure Drive the Outcome

The insuring agreement provides earnings and extra expense coverage when the insured’s “business” is interrupted by direct physical loss or damage from a covered peril at or near a “covered location.” Crucially defined terms shape the analysis:

“We” means the insurer (Nationwide).
“You” and “your” mean the Named Insured listed in the Declarations (Heartland Co-op).
“Net income” is expressly defined as the named insured’s net profit or loss before income taxes.

By explicitly referring to the named insured’s “actual loss of net income” and “extra expenses … [the named insured] would not have incurred,” the policy fixes the coverage trigger and measurement at the entity level, not at the location level. This entity-level orientation aligns with core principles of business interruption insurance: it indemnifies the insured business for the earnings it would have realized but for the covered peril.

The limit-of-insurance language is equally decisive: the insurer will “pay no more than the Income Coverage ‘limit’ … for any one loss.” The Schedule of Coverages showed two alternative structures:

An unchecked option that would have provided a limit “at any one covered location” (i.e., per-location limits), and
A checked option that tied limits to a “Scheduled Locations” attachment. Within that schedule, “Location 087” acted as a catch-all—setting an earnings and extra expense limit of $3 million for “all covered locations.”

Because the policyholder did not select per-location limits, and the schedule expressly imposed an “all covered locations” limit, the $3 million cap applied once, in the aggregate, to the derecho loss across the enterprise.

2) Precedents and Authorities Cited

The court rooted its analysis in Iowa’s settled approach to insurance contract interpretation:

City of West Liberty v. Employers Mutual Casualty Co., Just v. Farmers Auto. Ins., Jesse’s Embers, LLC v. Western Agricultural Ins.: The court reiterates that interpretation begins with the policy text; the plain meaning controls; courts cannot rewrite policies.
Metropolitan Property & Casualty v. Auto-Owners Mutual, National Surety Corp. v. Westlake Investments: Insurers must clearly state limitations on coverage; ambiguity triggers construction in favor of the insured—but only if the language is reasonably susceptible to two meanings.
Boelman v. Grinnell Mutual Reinsurance, Amish Connection, Inc. v. State Farm Fire & Casualty, A.Y. McDonald Industries, Inc. v. Insurance of North America: Not every disagreement creates ambiguity; courts avoid strained readings; ambiguity is a threshold requirement for pro-insured construction.
Farm Bureau Mutual Ins. v. Sandbulte, North Star Mutual Ins. v. Holty, Iowa National Mutual Ins. v. Fidelity & Casualty Co. of New York: Premium considerations can inform the reasonableness of an interpretation; a small premium does not rationally support an enormous, unbargained-for expansion of risk.
Cairns v. Grinnell Mutual Reinsurance, Stover v. State Farm Mutual Ins.: Courts will not write a new contract for the parties.
Steel Products Co. v. Millers National Insurance and Northwestern States Portland Cement Co. v. Hartford Fire Ins. (quoted): Business interruption insurance protects the earnings of the insured business as a whole; Steel Products addressed how long the interruption lasted at one location, not whether limits stack per location.
Secondary authorities: 46 C.J.S. Insurance § 1548 and 37 A.L.R.5th 41 (Danne) emphasize that business interruption covers the insured entity’s earnings loss; internal accounting is relevant to quantifying the loss, not multiplying the number of covered losses.

3) The Court’s Legal Reasoning

The court’s reasoning proceeds in three interlocking steps:

Whole-policy textual reading. The defined terms “you/your” (the Named Insured) and “net income” tie the measurement of business income and extra expense to the entity as a whole. The coverage grant lacks any language suggesting separate, siloed coverage by location. That textual orientation is reinforced by the selected Schedule of Coverages, which imposes a single limit for “all covered locations.”
“Any one loss” in context. Even though “any one loss” is not separately defined, its meaning is clarified by (a) the policy’s entity-level measurement, (b) the selected all-locations schedule, and (c) the single covered peril at issue (the derecho). Together, these establish one covered “loss” subject to one limit. The policy offered the insured a different structure—per-location limits—but that box was not checked. Courts do not retroactively supply unselected coverage.
Commercial reasonableness confirmed by premium. Heartland paid a $2,760 premium for earnings/extra expense coverage. Its reading would balloon Nationwide’s exposure to at least $258 million (and, by Heartland’s own argument, potentially much more) by stacking $3 million “per location” repeatedly or even without any cap on the number of “losses.” The court deemed that interpretation commercially unreasonable and unsupported by the policy’s text.

The court rejected Heartland’s remaining arguments:

Internal accounting and differing restoration periods. These may help calculate the quantum of loss but do not create multiple “losses” under the policy.
Per-loss versus per-location framing. While the limit is indeed “per loss,” there was only one loss here because a single covered peril (the derecho) caused the interruption, and the selected schedule applies across all locations.
Steel Products. Distinguishable; it does not approve per-location stacking of limits and, in its statement of purpose, supports entity-level measurement.
Waiver of multi-storm argument. Heartland waived any contention that the derecho comprised multiple storms. The court therefore treated the event as a single weather event and single covered peril.

4) Impact and Practical Implications

The decision will meaningfully influence how multi-location insureds, brokers, and insurers approach business income and extra expense coverage structures in Iowa and, by persuasive force, beyond:

No per-location stacking absent clear policy selection. If the Schedule of Coverages does not select “at any one covered location” limits (or specify per-location E&EE limits in the location schedule), an “all covered locations” selection yields a single, aggregate limit for a covered peril affecting multiple sites.
Entity-first measurement. Where defined terms fix “you/your” to the named insured and “net income” to the entity’s profit or loss, business income is measured at the enterprise level. Location-by-location accounting differences do not multiply the number of losses.
Premium as a reasonableness check. Iowa courts may consult premiums to test whether a proffered interpretation grossly inflates the insurer’s risk beyond what the premium would reasonably support.
Event characterization matters—and must be preserved. If an insured intends to argue that what looks like a single catastrophe is actually multiple covered perils with separate “losses,” that theory must be developed and preserved; otherwise, courts may deem it waived.
Policy design choices are outcome determinative. The policy here expressly offered a per-location limit structure via a checkbox. The failure to select it foreclosed per-location stacking. Insureds with distributed operations should pay close attention to these election mechanisms at placement and renewal.
Claims handling clarity. Adjusters and coverage counsel should align loss-adjustment frameworks to the elected schedule and defined terms. Where the schedule is “all covered locations” and a single covered peril causes widespread disruption, adjust the business income loss at the entity level against a single limit.

Precedents Cited: How They Informed the Decision

Several recurring themes from Iowa’s insurance jurisprudence guided the outcome:

Plain meaning and whole policy reading. The court followed cases like City of West Liberty, Just, and Jesse’s Embers in prioritizing the policy’s text—especially definitions, the coverage grant, and the schedule selection—over post hoc constructions that would expand coverage.
Ambiguity threshold. As in Boelman, Amish Connection, and A.Y. McDonald, the court emphasized that mere disagreement does not create ambiguity. The insured’s broad reading (“each and every loss without limit”) ran aground on unselected per-location options and entity-level definitions.
Commercial reasonableness and premiums. Sandbulte, Holty, and Iowa National Mutual endorse considering premiums to evaluate whether an interpretation coheres with the policy’s economics. The minimal premium here would not rationally support the immense, uncapped exposure the insured posited.
Non-rewriting of contracts. Cairns and Stover reflect the judiciary’s consistent refusal to supply coverage the parties did not bargain for—especially where the policy openly presented, but the insured did not select, a higher-coverage option.
Steel Products’ limited role. That decision informs measurement of the period of interruption at a site, but it does not authorize multiplying limits per site. Its recognition that business interruption aims to protect the insured enterprise’s earnings harmonizes with the entity-level reading adopted here.

Complex Concepts Simplified

Business income (earnings) coverage. Insurance that replaces a business’s lost net income and pays necessary extra expenses when operations are interrupted by covered physical damage.
Extra expense. Costs the insured would not have incurred but for the covered property damage, reasonably necessary to continue operations or reduce the period of interruption (e.g., temporary relocation, expedited shipping).
“Any one loss.” A policy cap applied to the loss caused by a covered peril. Here, read in context, it refers to the entity’s aggregate loss from the single covered peril, not separate loss calculations for each damaged location.
“All covered locations” versus “any one covered location.” Two distinct limit structures often available in schedules or declarations:
- All covered locations: one limit applies across every location for a given coverage.
- Any one covered location: a separate limit applies per location (often enabling stacking), if selected.
Named Insured (you/your) and entity-level net income. When “you” is the named insured (not each location), “net income” means the entity’s profit or loss before taxes. That anchors loss measurement at the enterprise level.
Period of restoration. The time reasonably needed to repair or replace damaged property and resume operations. Different locations can have different periods, but that affects the amount of loss, not the number of covered “losses.”
Waiver of arguments. Parties must timely and properly raise and brief theories (e.g., that a catastrophe comprises multiple storms). Failure to do so can result in waiver, constraining the court’s analysis.
Premium as a corroborative tool. While premiums do not set coverage, courts may consider them to evaluate whether an interpretation implies an implausibly large unpriced risk.

Practice Pointers

For insureds and brokers:
- Scrutinize the Schedule of Coverages and any location schedules. If you want per-location business income limits, ensure the “any one covered location” structure is selected and specific per-location limits are scheduled.
- Align expected catastrophe exposure with limits and premiums. Blanket “all covered locations” limits may not suffice for widespread events.
- Preserve causation/occurrence arguments (e.g., multiple storms, successive covered perils) early and explicitly in the claim and litigation.
For insurers and adjusters:
- Anchor business income adjustments in the policy’s defined terms and the elected schedule. Where “you” is the named insured and “all covered locations” is selected, measure the loss at the entity level and apply a single limit to a single covered peril.
- Use premium structure as a cross-check for plausibility when evaluating expansive readings proposed by insureds.
- Document the basis for treating a catastrophe as a single covered peril versus multiple perils, and address any “multiple events” contentions contemporaneously.

Conclusion

Heartland Co-Op v. Nationwide firmly establishes that, under Iowa law, where a commercial property policy’s business income and extra expense coverage measures loss at the named insured (entity) level, and the Schedule of Coverages applies to “all covered locations,” the phrase “for any one loss” creates a single, aggregate limit per covered peril across all locations—not per-location stacking. The court’s method is classic Iowa contract interpretation: start with the text and structure (including schedules and checkboxes), resist rewriting the bargain, recognize ambiguity only where two reasonable readings exist, and confirm commercial reasonableness with premium evidence when appropriate.

The opinion’s practical significance is substantial for multi-location enterprises: the ability to stack business income limits across sites will turn on the policy’s elections and schedules, not on internal accounting treatments or differing restoration timelines. Insureds seeking per-location protection must obtain it at placement; after a catastrophe, courts will not supply unselected coverage.