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Ghost Worker's Compensation Policy
Ghost Worker's Compensation policy is tailored for workers' compensation and excludes the owner from coverage when no additional employees are present. Ideal for subcontractors, this policy satisfies the coverage requirements of general contractors.
We partner with the best carriers writing workers' comp ghost policies.
What is Ghost Worker's Compensation Policy?
A ghost worker's compensation policy is a type of workers' compensation insurance policy that is specifically designed to satisfy the coverage requirements of a general contractor or other entity that has hired a subcontractor. It excludes the owner from coverage and doesn't have any additional employees working for the business. This policy does not provide actual workers' compensation benefits unless the employer hires employees or becomes liable for an uninsured subcontractor. The ghost worker's compensation policy may not be available in all states.
Why Would I Need a Ghost Policy?
Getting a ghost policy is typically done to fulfill an insurance certificate requirement for a general contractor or other business you perform company with. Small subcontractors frequently win bids to complete projects, but before they can begin work, they must show that they are covered by workers' compensation. The purpose of a ghost policy is to guarantee that a subcontractor has insurance in case they engage workers or another uninsured subcontractor to help with a project. Additionally, it enables them to exempt from their policy any payments made to subcontractors.
Ghost policies are only a type of workers' compensation insurance for independent contractors. Many small contractors and/or subcontractors do not employ staff and are unwilling to pay higher insurance premiums for their own coverage. The least expensive option for independent contractors seeking a workers' compensation policy is through a ghost policy.
What Does Ghost Worker's Compensation Policy Cover?
A ghost workers' compensation policy is a type of insurance designed for businesses with no employees. It's often called a ghost policy because it doesn't actually cover anyone. Instead, it provides a certificate of insurance (COI) to meet contractual or state requirements.
What a Ghost Policy Doesn't Cover:
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The business owner: The owner is specifically excluded from coverage under a ghost policy.
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Employees: Since the business has no employees, there's no coverage for them.
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Work-related injuries: A ghost policy doesn't offer any real insurance coverage for injuries or medical expenses.
Why Businesses Use Ghost Policies:
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Contractual Requirements: Many clients or contractors require proof of workers' compensation insurance, even if the business has no employees. A ghost policy fulfills this requirement.
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State Requirements: Some states mandate that businesses carry workers' compensation insurance, regardless of the number of employees. A ghost policy can satisfy this legal obligation.
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Bidding on Jobs: In industries like construction, businesses may need to demonstrate their ability to provide workers' compensation coverage, even if they have no employees at the time of bidding. A ghost policy can serve this purpose.
Important Considerations:
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Limited Coverage: A ghost policy is essentially a placeholder for insurance. It doesn't offer actual coverage for any work-related injuries or expenses.
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Potential Liability: If a business with a ghost policy hires an employee who is injured on the job, the business owner could be held personally liable for damages or medical expenses.
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State Availability: Not all states allow ghost policies. It's crucial to check with your state's workers' compensation department to determine if they are available.