Why Do You Need Workers’Comp?

The laws of Nebraska broadly require all non-agricultural employers to get and keep workers’ comp coverage. The laws are strict and permit the state shutdown of non-compliant employers. In a positive sense, Nebraska Workers’ Comp Insurance is a form of financial security for employers and employees.

In the event of injury or illness arising out of employment, the employee can get immediate medical care and a portion of lost wages. The employer gets freedom from lawsuits for such injuries and illness. The employer gets protection while protecting its employees. You need workers’ comp because it can preserve your business and personal assets in the event of an employment-connected injury, illness, or death.

Buying Workers’ Compensation in Nebraska

Nebraska law requires workers’ compensation coverage for employers with one or more full-time or part-time employee. Nebraska permits self-insurance but limits it to large and well-established firms. A special law authorizes government employers to form group self-insurance pools. You can buy insurance on the voluntary market or the assigned risk pool.

Instructions for Buying

The open market is the best place to start. If you are not familiar with workers’ comp or the local market, a licensed agent or broker can offer valuable assistance. They know the market and available products, and they are a good source of information. Private insurers use underwriting to determine whether to offer a policy.

Underwriting can disfavor new firms, recently expanded firms or those with a significant loss record. If you cannot find coverage in the open market, then you must either self-insure or get coverage in the state’s assigned risk pool.

What You Should Know About Workers’ Comp in Nebraska

The state maintains a second injury fund for workers’ that get a greater disability because of a prior injury. The employer in such case must only pay for the latest injury, and the Second Injury Fund pays for the increased level of disability. Evidence must show that the prior injury existed at the time of employment to get the benefit if the second injury fund.

Is Your Business Required to Carry?

Every employer with one or more employees must have workers’ comp insurance unless the law exempts the business or the employees. The exemptions include sole proprietors, farms, self-employed persons, independent contractors, officers of nonprofit corporations earning less than $1,000, and agricultural workers’.

Where to Buy Insurance?

  • 1

    The Open Market

    Nebraska has a vibrant private insurance market. You can get quotes from several providers and compare terms and prices to get the best deal for your business and your preferences. Market insurance providers use underwriting and new, small, and forms with significant history if claims may have difficulty getting coverage on the open market.

  • 2

    The Assigned Risk Pool

    Nebraska Workers’ Compensation Insurance Plan is the state assigned risk pool. Traveler’s Insurance Company is the plan administrator and carrier. The assigned pool is the insurer of last resort and employers may pay more than they would have on the open market.

  • 3

    Individual Self-insurance

    Large Nebraska firms with a large workforce and strong financial assets can apply for permission to self-insure. They must meet the below-listed standards.

    • Corporation or political subdivision
    • Minimum of five years in business in current form
    • An approved workplace safety program
    • 100 or more employees
    • Must file surety bond and proof of excel liability insurance.

How Much Does Workers’ Comp Insurance Cost?

The cost of workers’ comp depends on the modified claims experience of the employer and the types of occupations the business employs. The basic rate for each occupational class comes from the official rate-setting agency. In Nebraska, the rate-setting agency is the NCCI, National Council on Compensation Insurance.

What Is the Cost of Not Getting Workers’ Comp Insurance?

If you are an employer required to have Nebraska workers’ comp insurance, then you face severe actions if you do not. The laws requiring coverage are harsh for noncompliant employers. The state has a wide range of civil and criminal penalties that it can apply to enforce compliance with the law and administrative orders. The state can impose a fine for each violation of up to $1,000 per day per violation.

The law provides for criminal penalties and punishment up to one-year imprisonment.

An injured employee can sue his or her uninsured employers in State Court; the employer loses their common law defenses.

Factors That Impact Coverage

  • Legal

    Nebraska has made changes in its approach to workers’ comp, and some transitions appear to be still in process. Group self-insurance for public bodies has done well, and the laws set strict conditions and special undertaking for group self-insurance to guarantee payments.

  • Liability

    Nebraska has some special provisions for owners of leased truck fleets. When leasing trucks to a self-insured operator, the lessor does not have to cover workers’ comp for the drivers. The leasing company must cover its non-diver employees.

  • Rates

    The average cost for all employers and all occupations was $1.34 per $100 in 2014. That rate placed Nebraska in the lower half of all state rates. The Oregon study of Workers’ Comp premium rated Nebraska at 32 with an average rate that was 90 percent of the national median figure. Your modified experience rating will add to the basic rate set by the rating agency. Insurers add a risk cost for each occupation based on your claims history.

Other Helpful Tips

Nebraska law offers many opportunities for elective coverage. Sole proprietors, the self-employed, and officers of nonprofits that earn less than $1000 per year are not employees for workers’ comp purposes. The law encourages them to elect coverage for protection.

Conclusion

Nebraska encourages coverage by workers’ comp outside of the agricultural sector. The threshold number of employees is the minimum, and exempt businesses or employees can elect to get voluntary coverage. Nebraska Workers’ Comp Insurance has a unique administrative structure in the Workers’ Compensation Court. The Court administers the program and is the first level of trial or hearings to resolve disputes.

Sources:

  • Nebraska Workers’ Compensation Court
    http://www.wcc.ne.gov/

  • Nebraska Workers’ Compensation Insurance Plan
    https://doi.nebraska.gov/consumer/nebraska-workers’-compensation-insurance-plan