Nebraska Workers’ Compensation Insurance: Coverage, Premiums, and Claims

Nebraska workers’ compensation insurance laws require nearly every employer in the state, and every out-of-state employer doing work in Nebraska, to carry a workers’ compensation policy covering its employees. The rule kicks in with a single worker, whether full-time, part-time, or seasonal.¹ The Nebraska Workers’ Compensation Act, codified at Sections 48-101 through 48-1,118 of the Nebraska Revised Statutes, sets up a no-fault system: injured workers get medical care and wage replacement without having to prove the employer was negligent, and in exchange the employer is protected from personal injury lawsuits brought by those employees.² Skip the policy and you lose that protection.

Which Employers the Law Covers

Coverage is mandatory for every Nebraska employer that hires one or more workers in its regular trade or business, and for out-of-state employers performing work inside Nebraska on the same terms.¹ One temporary hire is enough to trigger the duty. State agencies and local government employers participate as well.

The Nebraska Workers’ Compensation Court enforces coverage requirements, handles claims disputes, and regulates reporting by insurers and self-insured employers.³

Who Counts as an Employee

Nebraska’s definition of “employee” catches some people who may not expect it and excludes others who look like employees at first glance.

Corporate Officers

An executive officer of a corporation who owns less than 25% of the company’s common stock is automatically treated as an employee under the Act. Officers who own 25% or more are not treated as employees by default but can elect to opt in. For nonprofit corporations, the dividing line is whether the officer receives more than $1,000 in annual compensation from the organization.⁴

LLC Members, Partners, and Sole Proprietors

Individual employers, partners, LLC members, and self-employed people are not automatically covered. They can elect to bring themselves under the Act if they are actively engaged in the business on a substantially full-time basis.⁴ Opting in means filing written notice with the workers’ compensation insurer.⁵ Opting in or out changes both benefits eligibility and the payroll figure used in premium calculations, so the choice directly affects what the policy costs.

Independent Contractors

People whose work falls outside the employer’s usual trade or business are not employees under the Act.⁴ The line between an employee and an independent contractor generally comes down to how much control the business has over how the work is done, looking at behavioral control, financial control, and the nature of the relationship.⁶ No single factor controls. Misclassifying an employee as a contractor does not erase the duty to provide coverage, and it is one of the most common compliance problems auditors find.

Exemptions from Mandatory Coverage

A handful of categories sit outside the Act. Section 48-106 lists them:¹

Household domestic workers performing service in a private residence.
Agricultural operations whose only employees are related family members.
Agricultural employers with unrelated workers, unless they employ ten or more unrelated full-time workers on each working day for thirteen calendar weeks in a year; coverage then kicks in thirty days after that thirteenth week.
Occasional agricultural work performed on a reciprocal basis for another operation.
Railroad workers engaged in interstate commerce, who fall under the Federal Employers’ Liability Act instead.

Exempt employers can still buy a policy voluntarily. Doing so provides the same lawsuit protection that mandatory participants receive. Without it, an exempt employer whose worker is hurt on the job faces an ordinary negligence suit with no statutory cap on damages.

What Happens If You Don’t Carry Coverage

The financial exposure for going uninsured is larger than most employers realize. An employer who fails to secure coverage loses the exclusive-remedy protection that workers’ compensation normally provides. The injured worker can sue in court for the full range of damages, and the employer must answer directly for the injury.⁷ In a serious injury case, that exposure can dwarf the cost of a policy.

The Nebraska Workers’ Compensation Court can also impose civil fines up to $1,000.⁸ The fine itself is modest. The open-ended liability behind it is what ends businesses.

How to Obtain a Policy

Nebraska offers three paths to coverage: buying from a private carrier, going through the assigned risk pool, or self-insuring.

Private Insurance Market

Most employers buy a policy from a licensed private carrier. An insurance agent can help compare quotes across multiple companies. The application generally requires your Federal Employer Identification Number, payroll projections by classification code, and information about your claims history and workplace safety programs. Underwriters review this data before issuing a quote, and the process can take anywhere from a few days to a couple of weeks depending on complexity.

Assigned Risk Pool

Employers who cannot find coverage in the open market because of high risk or a history of frequent claims can turn to Nebraska’s assigned risk plan. To qualify, the employer must show that at least two licensed carriers have denied coverage.⁹ The pool guarantees that every employer can meet its legal obligation, but premiums are typically higher than in the voluntary market. Improving your safety record and claims history is the surest way back into the standard market.

Self-Insurance

Larger employers with strong financials can apply to self-insure through the Nebraska Workers’ Compensation Court. Approval requires the employer to demonstrate sufficient financial resources to pay claims directly and to post an acceptable security deposit, bond, or trust. Professional employer organizations are not eligible to self-insure. Approved self-insurers must also contribute an annual amount equal to 2.5% of prospective loss costs, with a minimum of $25, to the State Treasurer.⁷ If the court later revokes approval, the employer must immediately obtain a policy or face the same penalties as any other uninsured employer.

What Drives Your Premium

Workers’ compensation premiums in Nebraska are built from three main components: payroll, classification codes, and experience history.

Payroll is the starting point. Carriers calculate premiums as a rate per $100 of payroll, so accurate records matter. If your payroll figures are off at the start of the policy, expect a correction at the annual audit. Underreporting payroll is one of the fastest ways to generate a large surprise bill.

Each employee is assigned a classification code from the National Council on Compensation Insurance, which serves as Nebraska’s rating bureau.¹⁰ These four-digit codes group workers by job risk. An office worker carries a very different rate than a roofer. Using the wrong code leads to audit adjustments and back-premiums.

The third piece is your experience modification rate, a multiplier that reflects your company’s own claims history compared to similar businesses. A clean safety record pushes the modifier below 1.0 and lowers your premium. A history of frequent or expensive claims pushes it above 1.0. NCCI calculates the factor for Nebraska employers.¹⁰

What the Policy Pays For

Nebraska workers’ compensation benefits fall into four categories. Medical treatment is paid in full by the insurer, with no deductible or co-pay, covering surgery, prescriptions, physical therapy, and assistive devices. Temporary disability pays a worker who cannot earn wages during recovery at 66⅔% of pre-injury wages, subject to a weekly maximum and minimum.¹¹ For injuries occurring on or after January 1, 2026, that maximum is $1,166 per week.¹² Payments start after a seven-calendar-day waiting period; if the disability lasts six weeks or longer, the insurer goes back and pays for that first week.¹³

Permanent disability benefits begin once the worker reaches maximum medical improvement. Nebraska uses a statutory schedule that assigns a set number of weeks of compensation at 66⅔% of pre-injury wages for the loss of specific body parts, with proportional amounts for partial loss. Injuries that don’t fit the schedule, such as back injuries or traumatic brain injuries, are compensated based on lost earning capacity, up to 300 weeks.¹¹ When a workplace injury or illness causes death, dependents receive weekly benefits at the same 66⅔% rate, and burial expenses are paid up to a statutory cap that adjusts annually with the Consumer Price Index. The cap sits at $11,900 as of mid-2025, and the annual adjustment is limited to 2.75%.¹²

Reporting Injuries on Time

When a workplace injury happens, the employer or its insurer must file a First Report of Alleged Occupational Injury or Illness with the Nebraska Workers’ Compensation Court within ten days of learning about it.¹⁴ The same ten-day deadline applies to every reportable injury, including fatalities.¹⁵

A reportable injury is any work-related incident that results in death, time away from work, restricted duties, job termination, loss of consciousness, or medical treatment beyond first aid.¹⁵ A minor cut treated with a bandage doesn’t need a report; a doctor visit does. Electronic filing is the standard method.

There’s a direct reason not to let reporting slide. The two-year statute of limitations on an injured worker’s claim is paused until the employer files the First Report. Delay the report and you extend your own exposure, sometimes for years. Filing on time starts the clock that eventually closes the liability window.

Workers also have a limited right to choose their own doctor. If the employer sends written notice after the injury explaining that the worker may select a family physician, the worker must name that physician before treatment starts. If the employer skips the notice, the worker can choose any qualified physician. When the employer provides proper notice and the worker has no family physician or fails to respond, the employer picks the treating doctor.¹⁶

1
Nebraska Legislature. Nebraska Code 48-106 – Employer; Coverage of Act; Excepted Occupations; Election to Provide Compensation
2
Nebraska Workers’ Compensation Court. Worker Frequently Asked Questions
3
Nebraska Workers’ Compensation Court. History, Mission, and Organization
4
Nebraska Legislature. Nebraska Code 48-115 – Employee and Worker, Defined; Inclusions; Exclusions; Waiver; Election of Coverage
5
Nebraska Motor Vehicle Industry Licensing Board. Workers Compensation Waiver
6
Internal Revenue Service. Independent Contractor (Self-Employed) or Employee
7
Nebraska Legislature. Nebraska Code 48-145 – Exceptions; Effect of Failure to Comply; Self-Insurer; Payments Required
8
Nebraska Workers’ Compensation Court. Employer Frequently Asked Questions
9
Nebraska Department of Insurance. Solicitation for Proposal Workers’ Compensation Insurance Assigned Risk Plan
10
Nebraska Department of Insurance. Workers’ Compensation FAQs
11
Nebraska Legislature. Nebraska Code 48-121 – Schedule; Total, Partial, and Temporary Disability; Injury to Specific Members
12
Nebraska Workers’ Compensation Court. Benefit Rates
13
Nebraska Workers’ Compensation Court. Workers’ Compensation Definitions
14
Nebraska Workers’ Compensation Court. Rule 29 – First Report of Alleged Occupational Injury or Illness
15
Nebraska Legislature. Nebraska Code 48-144.01 – Injuries; Reports; Time Within Which to File; Notification; Confidentiality; Exceptions; Terms, Defined
16
Nebraska Workers’ Compensation Court. Rule 50