What Is a Ghost Policy for Workers' Comp?

If you've been told you need workers' comp insurance to work on a project — but you're a sole proprietor, LLC member, or corporate officer who qualifies for a workers' comp exemption — you've probably encountered the frustrating reality: your exemption doesn't automatically produce a certificate of insurance (COI) that satisfies contractor requirements.

That's where a ghost policy comes in.

What Is a Ghost Policy?

A ghost policy is a workers' compensation insurance policy where the only person on the policy — typically the business owner — is excluded from coverage via an officer or member exemption.

The result: the policy exists, is written by a licensed carrier, and produces a legitimate COI. But because the only person on the policy has filed an exemption, no actual coverage is triggered if that person is injured. The premium is minimal — hence the name "ghost policy."

This is not a trick or a loophole. It's a recognized industry practice used by thousands of contractors, sole proprietors, and business owners across the country — particularly in Florida, Texas, Arizona, and Georgia, where construction activity and COI requirements are both high.

How a Ghost Policy Works

1. You file a workers' comp exemption (or already have one filed) as a sole proprietor, LLC member, or corporate officer
2. A workers' comp policy is issued by an insurance carrier in your name
3. Your exemption is attached to the policy, excluding you from coverage — but preserving the policy's existence
4. The policy produces a COI that shows "workers' compensation" coverage with the carrier name and policy number
5. You provide the COI to your client, GC, or project owner

From the general contractor's perspective, you've satisfied their insurance requirement. From an insurance perspective, you're holding a valid, active workers' comp policy issued by an A-rated carrier.

How Much Does a Ghost Policy Cost?

Ghost policies are priced at the minimum premium for workers' comp in your state and classification. In most cases:

• Florida: $800–$1,200 per year for most classifications
• Texas: $900–$1,500 per year (where WC is optional, ghost policies address COI requirements from clients)
• Arizona: $800–$1,400 per year
• Georgia: $900–$1,600 per year

The exact premium depends on your state, business classification (industry code), and carrier. It's far less than what a full workers' comp policy with real payroll would cost — which is the entire point.

When Should You Use a Ghost Policy?

A ghost policy makes sense when:

• You're a legitimate exempt owner (sole proprietor, LLC member, or corporate officer with a valid exemption)
• A client, GC, or project owner requires a workers' comp COI as a condition of doing business
• You don't have employees and don't intend to hire any (if you hire employees, you need a real WC policy that covers them)
• You want to remain exempt (and not pay for coverage you don't legally need) while still satisfying COI requirements

Don't use a ghost policy if:

• You have employees — a ghost policy only covers the exempt owner, leaving employees uninsured
• Your exemption isn't valid — the exemption must be properly filed and current for the ghost policy structure to be legitimate

The Audit Question

Like all workers' comp policies, ghost policies can be audited at the end of the policy year. During an audit:

1. The auditor will review payroll records
2. Because the only person on the policy (you) is exempt, there's no reportable payroll
3. The premium remains at the minimum amount

The key to a clean audit is having a valid, properly filed exemption on record that matches the officer exclusion on the policy. We ensure both documents are in order before the policy is issued, preventing audit complications later.

States Where Ghost Policies Are Most Common

Florida: The largest users of ghost policies — the construction industry is enormous and general contractors routinely require COIs from all subcontractors, regardless of size.

Texas: Texas's non-subscriber system means many employers opt out of workers' comp, but clients still require COI documentation. Ghost policies fill that gap.

Arizona: Construction growth in the Phoenix metro area has made ghost policies common for sole proprietor and small LLC contractors.

Georgia: Construction activity in Atlanta and surrounding markets drives significant ghost policy demand.

Ghost policies are available in all 50 states, but demand is highest in these states due to construction volume and COI requirements.

Getting Your Ghost Policy

The process is straightforward:

1. We verify your exemption status (or file your exemption if you haven't done it yet)
2. We identify the right carrier and classification for your ghost policy
3. We issue the policy and provide your COI, typically within 24–48 hours
4. We manage the annual renewal so you never have a lapse in COI availability

Call us at 844-967-5247 or use our online form. We can typically get a ghost policy COI in your hands within 48 hours of getting the necessary information.