Ghost Policy vs. Regular Workers' Comp
You got a message saying, 'Send me a certificate.' You don’t have employees. You need coverage. You may have heard of 'ghost policies.' This is what they are and how they are different from regular workers' comp.
A ghost policy is a type of workers' comp. It proves your business has workers' comp. It does not cover you, the owner. Regular workers' comp includes coverage for employees. A ghost policy is for the owner only. Regular workers' comp is for businesses with employees, subcontractors or other help.
What Ghost Policies Cover
A ghost policy proves your business has workers' comp. This is what someone else needs to see. But the policy does not cover you. If you get hurt at work, it does not pay for your medical bills. It helps you give a certificate when asked.
Ghost policies are useful for businesses that need to show coverage for legal or customer reasons. But remember: you, the owner, are not covered. You reject coverage for yourself when you buy one, so it pays no medical or wage benefits to you. If you want coverage for yourself, you need regular workers' comp, not a ghost policy.
What Regular Workers' Comp Covers
Regular workers' comp covers employees. If an employee gets hurt at work, the policy helps pay for their medical bills and lost wages. It also limits the business's liability if the employee sues. This type of policy is needed in most states if you have employees.
Regular workers' comp includes more coverage than a ghost policy. It covers more people and more situations. But you do not need it if no one else works for you. That’s where ghost policies come in. Ghost policies are for businesses that must prove coverage but have no workers to cover.
Why You Might Need a Ghost Policy
You may need a ghost policy if someone asks for proof of workers' comp and you have no employees. This could happen when you join a project, sign a contractor agreement, or work at a job site. The person asking wants to know your business is covered.
A ghost policy gives that proof. It shows your business is covered, even though you are the only person working. It gives you a certificate you can send to meet the request. But a ghost policy exists to show proof, not to pay benefits to you. You can learn more about what people need in our certificates guide.
When a Ghost Policy Is Not Right for You
A ghost policy is not right if you want coverage for yourself. If you get hurt at work, it does not help you. You reject coverage for yourself when you buy one. If you want to be covered, you need regular workers' comp. A ghost policy is also not right if anyone else works for you: an employee, a subcontractor (even one with their own insurance), a 1099 worker, day labor, or a family member who helps. Then you need regular workers' comp. The same goes for work above 15 feet. That is an automatic decline, and this program can't cover it.
Also, a ghost policy may not be needed if the person asking for the certificate says you don’t have to have workers' comp. Requirements vary by who is asking. Always check with them to be sure. If they just want to see the business has coverage, a ghost policy is perfect. You can find more on this in our ghost policy section.
How to Decide Between Ghost Policy and Regular Workers' Comp
Ask yourself: does anyone else work for me? That means employees, subcontractors, 1099 workers, day labor, or family who help. If yes, you need regular workers' comp. If no, a ghost policy may be right for you. But remember: a ghost policy does not cover you. If you want coverage for yourself, a ghost policy is not the right choice.
Look at what the person asking for the certificate needs. They may only need proof of coverage for the business. A ghost policy gives that. But if they need more, you may need a different policy. Always read what they are asking for — sometimes they want coverage for you, the owner, too. You can read more in our 'Do I Need It?' section.
How to Get Coverage
You don’t need to wait. You can get your quote in minutes. Get your quote. If no one else works for you and none of your work goes above 15 feet, a ghost policy can fit. Remember that a ghost policy does not include coverage for you.
Ghost policies and regular workers' comp are both types of coverage. They serve different needs. The right choice depends on your business and what is asked of you. Your state decides what is required — always check with them, or with the person asking for the certificate.
