Ghost Workers Comp

A ghost workers’ compensation policy is a type of insurance policy designed for businesses that are required by law or contract to have workers’ compensation coverage, even if no employees exist. It’s called a “ghost” policy because it technically provides no coverage for any workers — it exists mostly to meet legal or contractual requirements.

Key Features:

• No Employees Covered: These policies are typically issued to sole proprietors or independent contractors who have no employees and choose to exclude themselves from coverage.
• Compliance Purpose: Some states or general contractors require proof of workers’ comp insurance to issue a license, win contracts, or gain access to job sites. A ghost policy provides a certificate of insurance (COI) to satisfy these requirements.
• Low Premium Cost: Since there are no employees covered and the owner opts out, premiums are usually low but payment in full is required for the year — of course premium vary by state and the industry covered.
• No Real Coverage: If an actual worker gets injured, they will not be covered, as they aren’t declared on the policy. It’s purely a placeholder for compliance.

Why It’s Used:

• Sole proprietors or single-person LLCs in industries like construction often need it to bid on jobs or meet state law requirements.
• It helps avoid penalties for operating without workers’ comp, even if there’s no real need for coverage.

Do you need a Ghost Workers Compensation policy?

• Give our office a call today, 470-729-6400.