What Is a Minimum Premium?
You might wonder why your insurance costs more than you expect, even if your business doesn't do much work. This is because of something called a minimum premium. A minimum premium is the lowest amount you must pay for your policy, no matter how little work you do.
A ghost policy covers no one, so there is no payroll to count. The price is a flat minimum premium for your state and your trade. The same price applies if you work a few hours or a lot.
Why Does a Minimum Exist?
A ghost policy has no payroll to count, so there is nothing to base a usage price on. The program sets one flat price for your state and, in Iowa and Indiana, your trade. That flat price is the minimum premium, and your bill can't go below it.
What If You Only Work Part of the Year?
If you only work part of the year, the price is the same. A ghost policy has one flat price, however many months you work.
Even if you stop working for a few months, the policy still exists. You do not pay less for the months you do not work.
What Happens When Your Work Grows?
As your business grows and you do more work, your price does not change. A ghost policy has one flat price for your state and your trade. If you hire anyone, you need regular workers' comp, not a ghost policy.
For example, if you start a new project or take on more clients, your price stays the same. If you start a different trade, get a new quote, because your trade sets the price.
What About Refunds?
The premium is fully earned, so there is no refund once the policy is issued. The one exception is a full refund if underwriting finds that your application is false before the policy is issued.
The price you see in your quote is the price you pay: the premium, the $250 Audit Fee — Powered by Audit1, and the blanket waiver of subrogation if you choose it. You pay the whole price by card, in one payment.
How Can You See Your Number?
To see your price, you can get a quote. A quote is the actual price for your business, based on your state and your trade. You can start your quote to see your own number.
When you get your quote, it uses your state and your trade. In Illinois, a ghost policy costs $1,500 ($1,250 plus the $250 fee). In Alabama, Arkansas, Kansas, Mississippi, Missouri, Montana, Nebraska, New Mexico, South Carolina, South Dakota and Virginia, it costs $1,250 ($1,000 plus the $250 fee). In Iowa and Indiana, the price is the price of your trade plus the $250 fee, and your quote shows it. A blanket waiver of subrogation is optional. It adds $150. You can use this to plan for your insurance costs.
What If Your Work Changes During the Year?
Some businesses start small and grow quickly. If you only do more of the same work, your price does not change. If you move to a different trade, get a new quote, because the trade sets the price.
If anyone else starts working for you, a ghost policy cannot cover them. You need regular workers' comp, not a ghost policy.
How Does a Minimum Affect a New Business?
If you are just starting your business, you may not do much work at first. The price is still the flat price for your state and your trade.
As your business grows, the price stays the same until you change trade or hire help. Get a quote that matches your business now.
