You Can Hire Later, but Not on a Ghost Policy
You might start with a ghost policy because you have no employees. But later, you might hire someone. That’s okay. You can grow. You just need to change your insurance to match your new situation. A ghost policy is for the owner only, so it does not grow with you. When anyone else starts working for you, you need regular workers' comp, not a ghost policy.
A ghost policy is for a business with no employees and no subcontractors of any kind. It shows you have workers’ compensation insurance. But it does not cover you, the owner, if you get hurt. If you hire someone, your insurance needs to change. You need regular workers' comp so the new person is covered if they get hurt at work.
You cannot add an employee to a ghost policy. This is important. If you don’t switch to regular workers' comp, you could be breaking the law. Some states require you to have workers’ comp if you have even one employee.
What Is a Ghost Policy?
A ghost policy is a special kind of workers’ compensation insurance. It is for a business with no employees. It shows that you have insurance. But it does not cover you, the owner, if you get hurt.
Ghost policies are useful when you need to send a certificate of insurance to a client or landlord. It proves that your business is covered for workers’ comp. But it is not enough if you hire someone. Then you need regular workers' comp.
UNO sells ghost policies in 14 states. Your quote will tell you if it is available in your state. For more info, read Ghost Policies Explained.
What Happens When You Hire Someone?
If you hire someone, your insurance needs to change. A ghost policy has no room for a new employee, so you need regular workers' comp instead. Your premium (how much you pay) might change. The price depends on your state and the kind of work you do.
Your new employee must be covered if they get hurt at work. This is the law in most states. Without coverage, you lose the protection workers’ comp gives you if an injured worker sues.
You can hire at any time. But you must change your insurance first. Switch to regular workers' comp before the new person starts work, because a ghost policy does not cover anyone you hire.
How to Change Your Insurance
A ghost policy cannot be changed to include an employee. When someone else starts working for you, you need a regular workers' comp policy for your business instead. Your state's workers' compensation office can tell you what is required where you live.
When you switch, you might need to send a new certificate to anyone who asked for one. This shows your new insurance. It is important to keep everyone updated.
If you are still working alone, you can start your quote for a ghost policy. If anyone else works for you, you need regular workers' comp instead.
What to Know About Coverage
Workers’ compensation insurance covers your employees if they get hurt at work. It pays for their medical bills and lost wages. It also limits your liability if the employee sues you.
A ghost policy does not cover you, the owner. You reject coverage for yourself when you buy it. If you get hurt, you are not covered. If you want coverage for yourself, you need regular workers' comp, not a ghost policy.
It is important to know what your policy covers. Read your policy documents. Or ask your insurance company if you have questions. You can start your quote to see the real price of a ghost policy.
What to Do if You Grow More
Some states require coverage only once you have a certain number of employees. Your state decides the rules. Your state's workers' compensation office can tell you what is required in your area.
As your business grows, your insurance should grow with it. This keeps you and your employees safe. And it keeps you in line with the law. A ghost policy only fits while you work alone.
Ghost Policies and Regular Workers' Comp
It’s easy to confuse a ghost policy with regular workers' comp. But they are very different. A ghost policy shows your business has workers' comp, but it only works when you have no employees and no subcontractors. If you bring in even one person, you need to change to regular workers' comp.
Read more about ghost policies if you’re not sure what your certificate proves. And always check the fine print. A certificate shows coverage types and limits — but not the full policy terms.
When in doubt, remember the rule: if anyone else works for you, you need regular workers' comp, not a ghost policy.
Next Steps for Your Growing Business
As you grow, your insurance must grow with you. Adding one employee changes your coverage needs. A ghost policy no longer fits, and you need regular workers' comp. Your class code might also need to match the kind of work your new employee does.
For example, someone doing office work sits in a different class code from someone on a job site. A regular workers' comp quote works out the right code for the work each person actually does. Class codes vary by state — your state's workers' compensation office can tell you what applies in your area.
To find out what your business needs, start with who works for you. If it is only you, a ghost policy can fit, and you can start your quote. If anyone else works for you, you need regular workers' comp for your growing team.
