Ghost Policy for Workers' Comp: What It Is and When to Use It

If you're a sole proprietor or an exempt business owner in the construction trades, you've probably run into this situation: a general contractor requires proof of workers' comp insurance before they'll let you on the job — but you have no employees and aren't legally required to carry WC in your state.

The solution is a ghost policy.

What Is a Ghost Policy?

A ghost policy (sometimes called a minimum-premium policy or owner-exclusion policy) is a workers' comp policy where the business owner is listed on the policy but excluded from coverage. The policy is real, active, and produces a legitimate ACORD 25 certificate of insurance — it simply doesn't provide any benefit to the owner if they're injured on the job.

The name "ghost" refers to the fact that there's technically no covered payroll generating the premium. The minimum premium is what you pay to keep the policy active.

When Should You Get a Ghost Policy?

A ghost policy makes sense when:

• You're a sole proprietor with no employees
• Your state allows owners to exclude themselves from WC
• A general contractor, project owner, or licensing board requires proof of WC
• You want the cheapest compliant solution

It does NOT make sense when:

• You have actual employees (they need real coverage)
• You want personal coverage if you're injured on the job
• Your state doesn't allow sole prop WC exclusions in the context you need it for

What Does a Ghost Policy Cost?

Ghost policy pricing varies by state and trade, but generally falls in the range of $800 to $2,500 per year. Roofing and other high-hazard trades trend toward the higher end; lower-hazard trades may qualify for minimum premiums closer to the $800–$1,200 range.

Compare this to a full WC policy based on actual payroll, and the savings can be significant for owner-operators who simply need a certificate.

What Does a Ghost Policy Actually Cover?

Here's the critical point: a ghost policy with an owner exclusion does not cover the owner for on-the-job injuries. If you fall off a roof, your WC carrier won't pay your medical bills or lost wages.

The policy exists solely to satisfy certificate requirements. For your own health and disability protection, you'd need separate coverage.

Audit Risk

At the end of your policy year, the carrier will audit your payroll. If you have zero payroll (as expected for a true sole prop ghost policy), the audit comes back clean. If you've added employees during the year and didn't report them, you'll owe additional premium — and potentially face policy issues.

Be honest with your carrier about your situation. If you hire employees, call your agent and add them to the policy properly.

States Where Ghost Policies Are Common

Ghost policies are most common in states like Florida, Texas, Georgia, North Carolina, and Arizona — states with high volumes of independent contractor activity and active construction markets.

Not every state allows ghost policies in the same way. Some states have minimum employee thresholds or owner exclusion rules that vary by entity type. Your agent can confirm what's available in your state.

Will a GC Accept a Ghost Policy COI?

Most general contractors accept ghost policy certificates without issue. The ACORD 25 shows active workers' comp coverage, which is what they need. Occasionally, a GC's own insurance carrier will require documentation showing actual employee coverage — but this is the exception, not the rule.

If you're unsure whether a specific GC will accept a ghost policy COI, your agent can help you evaluate your options.

Ready to get a ghost policy quote? Call 844-967-5247 — we can usually bind same day.