What is a workers comp ghost policy, and do I need one?
It is a workers compensation policy for a business with no employees to cover, typically a sole proprietor or single-member LLC who has excluded themselves. It produces almost no coverage and one very useful thing: a certificate of insurance. General contractors and clients routinely require evidence of workers comp before letting you on site, and a ghost policy satisfies that requirement at minimum premium. It is bought for the paperwork, and that is a legitimate reason.
Tell us the situation.
One licensed human replies the same business day — not five agents, not an auto-responder. If the policy you have is already the right one, we will tell you.
We use this to quote and service your insurance, and we do not sell it or pass it to lead networks. Privacy policy.
Send us what you have. We’ll tell you if it’s right.
Your current policy paperwork, a renewal notice, or nothing at all. A licensed agent reads it and replies the same business day.
The detail
Where a subcontractor cannot produce evidence of workers compensation, a hiring contractor’s premium audit can add payments made to that subcontractor to the contractor’s own payroll, which is why certificates are demanded even from owner-only businesses.
What this means for you
- Understand what you are buying: a certificate, not protection. If you are injured, an excluded owner on a ghost policy is not covered.
- Check your health plan. Many exclude work-related injury, so an excluded owner can fall between two policies with nothing responding.
- It stops being a ghost policy the moment you hire anyone, including a day-rate helper. Tell your insurer before the first payroll, not at audit.
- It is usually cheaper than losing the work. Contractors who cannot produce a certificate get removed from bid lists, and the minimum premium is small against that.
Go deeper on any of these
Related questions
- Why do contractors demand it if I have no employees?
Because of how their own audit works. If you cannot produce a certificate, the auditor can treat what they paid you as payroll and charge the general contractor comp premium on it, so an uninsured subcontractor costs the contractor money directly. It is not scepticism about your business; it is that your certificate is what keeps you off their payroll figure. That is also why they want it renewed annually rather than once.
- How uninsured subs hit an audit
- Am I covered if I get hurt?
Generally not, and this is the part worth being clear-eyed about. A ghost policy exists because the owner is excluded, so an owner injured at work has no comp claim, and many health plans exclude injuries arising out of employment, on the assumption comp covers them. If you want coverage for yourself, elect into the policy rather than buying a ghost, and price it both ways. On a lower-hazard class the difference is often smaller than people expect.
- Including or excluding yourself
- What happens if I hire someone?
The policy stops being a ghost policy and needs to reflect real payroll. Tell your insurer when you take on anyone — including casual help, a day-rate laborer or a family member, because at audit the payroll will be found and the premium charged retrospectively, sometimes with a penalty. Businesses that hire a first employee mid-term and say nothing until audit get the largest bills.
Need this handled?
Reading about it and having it handled are different jobs, and the second one is ours. We place the accounts other brokers decline — claims history, a cancellation, an unusual operation, a business nobody wants to underwrite twice — and we will tell you when the policy you already have is the right one. Tell us the situation and a licensed human replies the same business day.
Written by the licensed brokers at Boring Insurance. Last updated 2026-08-22. See all guides.