LLC Reimbursement, Indemnification, Advancement, and Insurance Requirements in Nebraska
At a glance
| Governing LLC law and scope | Neb. Rev. Stat. §§ 21-110, -137: operating-agreement limits, qualifying company payment/liability, and insurance |
|---|---|
| Covered people and capacities | Member in member-managed LLC or manager in manager-managed LLC for payment/debt rule; member or manager for insurance; § 21-137 states no former-status extension |
| Company-payment reimbursement | Shall reimburse company-activity payment if member/manager complied with §§ 21-134 and -138 (§ 21-137(a)) |
| Indemnification and conduct limits | Shall indemnify debt, obligation, or other liability incurred on company behalf if §§ 21-134 and -138 duties were met; no separate broad proceeding indemnity in § 21-137(a) |
| Expense advancement and repayment | § 21-137 states no interim defense-expense advance or repayment undertaking; its mandatory rule addresses qualifying payment/liability |
| Insurance purchase authority | May insure member/manager capacity or status liability even if agreement could not limit underlying liability (§ 21-137(b)) |
| Approval and court procedure | § 21-137 states no special indemnity approval vote or court application; ordinary member/manager governance follows § 21-136(b)–(c) |
| Agreement control and survival | Agreement may alter/eliminate § 21-137(a) indemnity, subject to § 21-110(b), (f) duty and money-damages limits; no former-status continuation in § 21-137 |
| What the statute does not decide | Actual capacity, company-activity nexus, compliance with §§ 21-134 and -138, agreement terms, and policy coverage require case-specific review |
Requirements one by one
Payment and company-activity liability
Neb. Rev. Stat. § 21-137(a) combines two mandatory obligations: the LLC “shall reimburse for any payment made and indemnify for any debt, obligation, or other liability incurred” by a member in a member-managed company or a manager in a manager-managed company while acting on the LLC's behalf. The person must have complied with the duties in §§ 21-134 and -138 when making the payment or incurring the liability. Section 21-134(a) addresses prohibited distributions, and § 21-138(d) states the good-faith and fair-dealing obligation. The section does not give every status-related claim the broad indemnity treatment seen in some states.
Insurance and agreement control
Section 21-137(b) permits insurance for liability asserted against or incurred by a member or manager in that capacity or arising from that status, even when § 21-110(f) would prevent the agreement from eliminating or limiting the underlying liability. Section 21-110(a) makes the Act the default where the operating agreement is silent. Section 21-110(f) permits the agreement to alter or eliminate the subsection (a) indemnification; § 21-110(b)(4) protects duties, § 21-110(b)(5) protects good faith, and § 21-110(f)(1)–(5) lists money-damages exceptions. The insurance permission does not determine policy coverage.
What trips people up
Section 21-137(a) is about payments and debts incurred in company activities, and subsection (b) is about insurance. Neither prescribes an interim litigation-expense advance or repayment promise, an indemnity-specific approval vote, or a court application. Ordinary decisions follow the member-management and manager-management rules in § 21-136(b)(1), § 21-136(b)(3), § 21-136(c)(1), and § 21-136(c)(3). The subsection (a) rule does not expressly extend to a former member or manager merely because of former status.
Common questions
Does status alone entitle someone to indemnity? No. Section 21-137(a) ties the payment or liability to activities for the company and to compliance with the two cited duty sections.
Can the LLC insure conduct it could not exculpate? Yes. Section 21-137(b) expressly permits the insurance purchase, while coverage remains a policy question.
Does the statute require an advance for defense costs? Section 21-137 contains no advance procedure; the company's agreement and other law must be checked.
Statutes and sources
- Neb. Rev. Stat. § 21-110(a), (b), (f): “The operating agreement may alter or eliminate the indemnification for a member or manager provided by subsection (a) of section 21-137” subject to its limits. Official current statute, accessed 2026-09-23.
- Neb. Rev. Stat. §§ 21-134(a), 21-136(b)–(c), and 21-138(d): the cited distribution, governance, and duty provisions referenced by § 21-137. Official §§ 21-134, 21-136, and 21-138, accessed 2026-09-23.
- Neb. Rev. Stat. § 21-137(a): “A limited liability company shall reimburse for any payment made and indemnify for any debt, obligation, or other liability incurred” under the stated capacity, activity, and duty conditions. Official current statute, accessed 2026-09-23.
- Neb. Rev. Stat. § 21-137(b): “A limited liability company may purchase and maintain insurance on behalf of a member or manager” despite the stated agreement limit. Official current statute, accessed 2026-09-23.
Source links
Every statute quoted above, linked, with the date we checked it.
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