What is a Workers’ Comp Ghost Policy? | DirectWorkComp

What is a Workers’ Comp Ghost Policy and Do You Need One?

If you’re an independent contractor or self-employed worker, some clients may ask to see proof of workers’ compensation coverage before hiring you for a job. This may seem odd considering you don’t have any employees, but it’s actually a common requirement for many business owners. What do you do? The answer, get a workers’ comp ghost policy.

If you don’t want to spend the extra money on an entire workers’ compensation policy, you can purchase a ghost policy instead. A workers’ comp ghost policy is an affordable policy that excludes the owner from coverage and typically doesn’t cover any additional employees. 

Let’s take a closer look at how a ghost insurance policy works, what it covers, and whether or not you need one.


What Does a Workers’ Comp Ghost Policy Cover? 

A ghost policy doesn’t provide any real coverage for self-employed persons. Also known as a minimum premium policy, ghost work comp helps protect those that hire independent contractors or freelancers from having to cover any on-the-job injuries. 

Think of it this way. If you’re a subcontractor hired for a construction project, your employer or General Contractor may require you to show proof of a workers’ comp ghost policy before getting started. This helps them make sure they won’t be liable for your medical bills if you get injured on the job. 

This also protects your client or General Contractor in the event that you hire more subcontractors for the job and one of them gets hurt. Typically no one will even know you have purchased a ghost work comp policy.

It’s important to keep in mind that a ghost policy doesn’t provide any real protection or coverage for your injuries on the job, but it does satisfy the insurance contractual requirements that may exist and eliminate costly audits.

Workers' Comp Ghost Policy


Do You Need a Workers’ Comp Ghost Policy? 

A workers’ comp ghost policy is only for independent contractors or self-employed persons who have their own liability insurance. Since ghost insurance doesn’t actually cover any workplace injuries, you’ll need to be covered by another policy like health insurance or an accident plan. 

The number of workers who need a workers’ comp ghost policy might surprise you! 

If we track data from 2014 to today, the number of freelancers, independent contractors, and self-employed persons has increased by 8.1% for a total of 58 million people currently working in the gig economy.

Since a workers’ comp ghost policy caters specifically to this demographic, we can expect the need for ghost insurance to rise with the number of freelancers. 

Do you need to have a ghost policy? The answer depends on who you’re working for and what they prefer.

If Your Client Requests It

Your client may also request to see proof of a ghost policy before working with you. Many clients like to know they won’t be held liable for any injuries you incur on the job. 

Most clients that request proof of ghost insurance are in the construction or manufacturing fields where more accidents tend to occur, though there are some other instances where a contractor will request one.


Organize Your Ghost Policies With Direct Work Comp

If you’re a worker who relies on freelance gigs, having a ghost insurance policy can put you ahead of the competition and keep you in line with your specific state requirements. Not sure where to find a ghost policy that works for you? Direct Work Comp can help. 

Our team of experts can help you find a ghost policy that fits your needs and budget. Get a quote today!





Are We Ready For A Workforce That is 50% Freelance? | Forbes 

Ghost Policies & Workers’ Comp Insurance | Small Business Chronicle 

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