The basics

What is a ghost policy?

Some one-person businesses choose to get a workers’ comp ghost policy, which is an affordable workers’ comp policy that excludes the owner/s from coverage. People will usually get this type of policy in order to meet the insurance requirements of persons they work for. A ghost policy lets them provide a Certificate of Insurance to those who request one, without paying too much.

Get a ghost policy

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How does “ghost insurance” work, exactly?

Only business owners with no employees can purchase this type of policy. It’s a minimum premium policy that “excludes” the owner from coverage and benefits. Because the owner can’t have any employees with this kind of policy, it covers no one, or you could say it covers a ghost.

The premium (price) of a workers’ comp policy is based on your payroll for the year.

Since there is no payroll (when you work alone and don’t hire employees or subs), it doesn’t cost as much as workers’ comp policies that cover employees (which makes sense).

A WC ghost policy lasts for a period of one year.

Once the policy is purchased, a Certificate of Insurance can be issued to requesting parties.

It’s usually issued to a sole proprietor, partnership, one-person LLC or one-person S-corp, as long as the state allows the owner to be excluded from coverage under the workers’ compensation policy and there are no employees to generate ratable payroll. That’s what makes it popular option for 1099ers, as they often do not have any employees and are simply trying to find independent contractor insurance to satisfy requirements.

Who is ghost insurance for?

Ghost policies are designed for self-employed business owners who:

  • Have no employees or subcontractors
  • Have no plans to hire employees or subcontractors during the policy period
  • Have no payroll (besides the owner/s)

Some popular candidates include subcontractors and other self-employed workers who also get plumbers insurance, electrician insurance, HVAC insurance, and landscaping insurance.

Additional conditions

  • The business owner understands that the policy offers no coverage or tangible benefits to anyone (that’s why it’s called a “ghost” policy).
  • The business owner does not plan to hire employees or subcontractors during the policy period, and if they do they will notify their insurance agent.


The policy owner will be audited annually to ensure they’re following these strict guidelines. If the auditor determines the guidelines were not met, the carrier may charge additional premium, or even cancel the policy. 

The coverage

Ghost policies don’t provide coverage, so why would I want one?

The biggest reason small contractors and subcontractors apply for ghost policies is to meet state requirements or to get a cheap Certificate of Insurance to provide to a client or general contractor.

There are a lot of independent contractors (without employees) who do not want to pay higher premiums to cover themselves with traditional workers’ compensation, yet are required to show some proof of workers’ comp insurance. And many small subcontractors are just looking for the best way to inexpensively meet the insurance requirements of hiring parties.

Ghost policies are a valid option for those who know they won’t be hiring any workers during the year and don’t have a high risk of physical injury on the job, yet need to satisfy proof of insurance requirements. We work with an insurance partner who provides ease of doing business, low rates, and stable coverage.

A few benefits of our program:

  • It’s paperless. That means you can sign up from anywhere.
  • It’s fast. We can usually get you coverage the same day you apply, and the policy be active immediately– so you can get back to working.
  • It’s easy. There are no mid-term audits. There is only one audit at the end of the year, which is a great thing for everyone involved.
  • We can provide a waiver of subrogation upon request.

Proof of insurance

The reason people buy ghost policies

The reason most contractors buy minimum premium workers’ comp is to be able to provide proof of coverage (aka COI) to potential clients. A lot of employers, especially in construction, require proof of insurance as a job qualification.

Of course, if you can spend the extra money, we always recommend an affordable workers’ comp policy with standard benefits.  The main reason is that you’ll actually have coverage provided to you. If price is an issue, there are often pay-as-you-go payment plans available that you can apply for. If you have any questions, just ask one of our experts!

How do I apply for one?

We have a great workers’ comp ghost policy for sole proprietors, independent contractors, and other one-person businesses looking for ghost quotes. Our plan also includes an accident policy, and it’s less expensive than the assigned risk plan in most states (which is really cheap). What makes this package so great is that it comes with an accident policy, which gives you 24-hour coverage.

It’s important to understand that an accident policy is different than workers’ compensation because there are coverage limits, but at least you’ll have insurance coverage if you get hurt.

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Price Factors

How much does it cost?

A minimum premium policy is basically a type of workers’ comp policy that is the cheapest possible premium for a policy. So it should generally be the least expensive type of workers’ compensation around. However, the price varies by state. Most ghost policies are written through the state insurance fund, otherwise known as the assigned risk plan. However, we have access to a cheaper ghost policy combined with an accident policy – that’s still less than the assigned risk plan in most states.

For example, in Virginia, Georgia, and South Carolina, the cost is $958. However, in North Carolina, it’s a little more expensive at $1058. Take a deeper look at Workers’ Comp Insurance Costs.

We can save you money.

The best way to know for sure how much insurance will cost is to apply for a free estimate. We compare coverage from over 30 top insurance companies (for free) to find you the right commercial insurance. No hidden fees and no obligations.

We can help you find the right workers’ comp, liability insurance, property insurance, business auto insurance, and everything in between.