2.3 million men and women experience accidents while on the job. Workers comp insurance is a critical part of the US workforce. It functions to protect employees and employers against the costs of numerous injuries and illnesses.
Medically consulted injuries totaled 4.2 million in 2021. In the same time period, the US Bureau of Labor Statistics recorded over 5,000 of those incidents having deadly consequences. They reported a 9% increase from the previous year.
For these reasons, it is easy to see why workers' comp policies are required for businesses. However, some can have exceptions to this policy if they don’t have eligible employees.
However, this exception can cause a problem for legal and client requirements, leading to some of these businesses purchasing a ghost policy for workers comp.In this article, we will cover the basics including:
Definition of workers comp ghost policy
A brief history of workers comp ghost policy
Why would you need a workers comp ghost policy?
Is workers comp ghost policy illegal?
Cost of workers comp ghost policy
Where to purchase workers comp ghost policy
A workmans comp ghost policy is an insurance policy geared toward self-employed business owners that lets them satisfy client requirements and state laws about workers comp. However, since the owner doesn’t have any employees needing coverage, the policy doesn’t actually cover anyone.
A workers comp insurance ghost policy provides a certificate of insurance (COI) for the owner, which is often required of him to conduct business. These policies are often cheaper than a regular workers comp policy, so ghost workers compensation might actually be the right decision for owners.
A workers compensation insurance ghost policy is great for saving money, but employers should be wary that there are serious legal consequences. Be sure to pick an insurance company that will help you decide if you need a workers comp ghost policy for your personal situation.
Workers' compensation first came after states began passing workers compensation acts in response to revelations about riskier working conditions in an increasingly industrialized workforce in the 1900s.
Before this, workers would have to sue their own company to get any compensation and would often lose because the burden of proof was too high and legal costs were to much.
Eventually, states would make a workers' compensation insurance policy compulsory to for the majority of businesses. Customers and clients would also adopt their own standards requiring proof of this kind of insurance.
However, not every business has employees so having to pay for a workers comp policy when it doesn’t grant a benefit was seen as an undue burden by many. In response, insurance companies began offering ghost workers comp insurance which allowed companies to have proof of this kind of insurance while paying less for premiums. This was when the current ghost policy workers comp definition came to be, which is an employee insurance policy that covers no employees.
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The main reasons to buy a workers comp ghost policy include the following:
To secure a contract with a client who requires proof of workers comp insurance
To fulfill state requirements for your company to operate there
If you are bidding on a job in some industries like construction, you need to show you have the potential to hire employees and provide them coverage. A workers comp ghost policy is an inexpensive way to show this
Yes, in some states, workers’ comp ghost policies are banned by law. The reason these policies are banned is that some employers take advantage of them and refuse to use them the right way, leading to unreported workers not getting coverage. Below is a list of which states these policies are offered vs where they are unavailable:
|Legal||Illegal or Unavailable|
|New Mexico||Rhode Island|
Some states will have punishments for utilizing a workers comp ghost policy. You will have to pay the penalty for not having the proper worker’s compensation requirements. These penalties can be quite severe, resulting in over $10,000 in fines and jail time of up to a year. Your business may also be ordered to be shuttered.
Workers compensation ghost policy in Georgia is available between $1500-$1800. Georgia’s State Board of Workers’ Compensation requires that your coverage starts from the first day of work. The law requires any business with three or more workers must have a form of workers’ compensation insurance. You can verify your coverage on their website
Ghost policies in South Carolina typically cost between $1250-$1550. The South Carolina Workers Compensation Commission determines that anybody with four or more employees requires coverage.
In South Carolina, non-profit organizations are required to have workers’ compensation policies as well, though it does make exemptions for agricultural employees and federal employees.
While a workers comp ghost policy can be a good option, it might not always be the best thing for your company. A few reasons it would be better to purchase real workers comp insurance include:
If you plan to hire full-time workers in the future, you will want to invest in a real workers comp policy earlier so you can start working on safety incentives and getting your premium down early
Some states ban ghost workers comp policies so that you would have no choice but to purchase a real one
If you have forgotten to disclose to your insurance company when you hire an employee, you could get hit with a retroactive premium penalty that could be unexpected and costly
Yes, despite a ghost workmans comp policy offering no coverage, it does cost a premium every month. Rates differ from one company to the next. You can get the cheapest workers comp ghost policy quote by comparing offers. Start by clicking the “Get Quotes” button on this page.
The workers comp ghost policy cost is $150 per month or $1,800 per year. Unlike normal workers comp insurance, ghost workers comp policy cost won’t vary based on your payroll size. This means you will often be charged the minimum premium for the policy. Below is a price comparison of a few different companies that offer ghost policy workers' compensation:
|Company||Cost per Month||Cost per Month||Best For|
|Tivly||$20||$240||Comparing quotes over the phone|
|FarmerBrown||$84||$1,008||Broad experience in offering ghost workers comp insurance|
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Below we have broken down some insurance companies that sell a workers comp insurance ghost policy. Read some of the reviews below to know their pros, cons, and average cost.
Great selection of partners
Personalized customer service
Doesn’t issue online quotes
Tivly offers competitive insurance policies with its various insurance partners. They are considered best for starting price and offer workers comp ghost policy options. The company is highly trusted, earning an A rating from the Better Business Bureau. Call a representative now to compare quotes over the phone.
A big advantage of using Tivly is that they have a huge marketplace of over 200 partners to shop around for. They use flexible targeting that will make the process of narrowing it down to the best option extremely simple.
Best for: Comparing quotes over the phone
Average cost: $20 per month
Our rating: 10/10
Great value options
Have to call for quotes
FarmerBrown is an insurance brand with experience in ghost workers’ compensation policies. This company is best for its agent expertise. They will work with you to determine whether you need a real workers' compensation policy or if a ghost policy can save you money. They are licensed in all 50 states and have an A rating from the Better Business Bureau.
Best for: Broad experience in offering ghost workers comp insurance
Average cost: $84 per month
Our rating: 10/10
Quotes in minutes
Doesn’t issue a lot of information about the workers comp ghost policy they sell
Another good option for a workers comp ghost policy is Contractors Liability. This company is best for its ability to get quick online quotes. They work with you to be militant about your insurance certificates, and they specialize in the construction industry to make sure you get to bid on the contracts that you want with the correct insurance. Their website has good resources for those unfamiliar with ghost workers comp insurance, and their agents speak both English and Spanish.
Best for: Instant quotes
Average cost: $100 per month
Our rating: 10/10
Lonnie Bell Insuranker
Policy Type: Business Insurance
Company name: Employers Insurance
Use anyone except Employers. Period. They are non-transparent and shameful. After I complained long enough to warrant a call from a supervisor, the supervisor called back from a PRIVATE NUMBER (no caller ID), left a message that they are not reversing their decision (without any communication with me), and failed to leave a phone number for me to call back. She was hiding! They also fact find via email and phone calls, which is terrific for speed and communication. However, after setting a precedence of email or phone calls, they send time sensitive information via email, without any heads up... they are hoping you miss it and forfeit via expiration. Evil policies. Go elsewhere.
This place is an absolute joke of a company and should be ashamed of the way they conduct business. I was hurt on the job at the end of July and it took them just shy of 7 weeks to issue out a paycheck to me. Yes the amount was back dated but still. Not many have the luxury of not receiving a paycheck for almost 2 months. To top it all off, the original adjuster marked me down for the wrong state which caused a problem from the get go, I've had 3 different adjusters now since each one can't seem to figure out the simplicity of my claim. All my paperwork which includes, my job, house, and drs visits all are from the same state and city but yet some how I have been filed under a completely different state 1500 miles away. They do not answer your phone calls or emails no matter how many you leave. I've had to escalate my frustrations to the supervisors of each of these individuals in order to even get some kind of response. I've had more communication and information given to me about my claim from the customer service representatives then the actual adjusters.......... please tell me how that works?! A serious overhaul needs to happen here in order to serve your clients the way they deserve to be taken care of. 10/10 do not recommend this company to a single soul on earth
I have never had the displeasure of working with a more incompetent and disrespectful person in my life. I’m an injured worker and the adjuster that was assigned to my case was named Carrie Furgeson. In the past 6 weeks that I’ve been injured and out of work I have only been able to get ahold of her twice, not for lack of trying. I have left countless voicemails, countless emails, and she ignores them all. When I am finally able to get ahold of her I’m greeted with terrible customer service. She is rude, she talks over me and I’m hardly able to get a word in edgewise. She spelled my name wrong on my documents even after I spelled it for her properly countless times, this caused a whole new issue with my bank. I have bill collectors from the hospital calling me demanding payment and Carrie Furgeson won’t do a single thing to help, or to get them paid. All of my documentation is in Colorado, my job is in Colorado, my address is in Colorado, all my Dr offices and appointments have been in Colorado and Carrie still managed to hold my claim because she wasn’t sure what state she needed to file it under. It’s been 6 weeks since my Injury and my company still hasn’t received the wage paperwork to fill out so they can get me my correct wages. When she’s not ignoring me she’s answering my questions with “I don’t know” well I don’t know how she got this job, because apparently she doesn’t know anything about it. She is a disgusting morose individual inside and out and I genuinely wish her the worst in all of her future endeavors. I highly recommend you don’t use this company. Please if you are a business owner and your looking into this company please don’t use them. I’m sure they have the cheapest payment and that’s why companies use them in the first place, but you will be doing your employees a grave disservice by forcing them to venture into this absolute dumpster fire of a company. I would rate 0/5 if possible but 1 was the lowest I was allowed.
Their general liability insurance purchase process is simply the best online experience I've ever had in my life!
As long as they cover your line of business, you're literally covered! best rates, best coverage, best online experience, best professionals, can't be happier that I chose them!