Workers’ Comp Ghost Policy: Cost & Quotes From $30/mo

  

In terms of worker’s compensation insurance, a workers’ comp ghost policy exists and serves to cater to certain business owners. This article explains in depth what a ghost policy is, its features, costs, and how to find the cheapest options available.

What is a Ghost Policy?

A ghost policy is a particular type of workers’ compensation insurance created for independent contractors, sole proprietors, and self-employed businesses with no employees. This policy effectively provides insurance documentation without any real protection for the owner and the owner’s business activities.

Ghost policies can be particularly helpful in instances where business owners are obliged by contract or state regulation to provide proof of workers’ compensation insurance but do not wish to pay a premium for policies providing extensive cover. 

Those are Policies that are meant to meet minimum standards imposed by states but do not provide cover to the business owners themselves, hence the name “ghost,” meaning minimal cover.

What Does a Workers’ Comp Ghost Policy Cover?

To put it simply, business owners do not get any funding or protection from a workers’ comp ghost policy . It simply acts as a certificate of insurance (COI) and nothing more, as state regulations or contract terms are being complied with. Below are the main directives about the coverage’s scope:

  • Proof of Coverage: The skeleton policy’s main goal is to show the business owner has coverage of some type for workers’ compensation. This may come in handy during contract bidding or when clients demand that such documentation be produced.
  • Non-Employee Coverage: On the contrary, due to a lack of employees, ghost policies do not cover any medical costs or wages lost due to injury sustained by the business owner.
  • Subcontractors Coverage: The policy does not extend to the business owner, but it might cover some subcontractors without workers’ compensation insurance. However, depending on the state and even the specifics of the policy, things could be very different.
  • Exclusion from Benefits:  If an accident occurs involving the owner, they will not be compensated through this insurance. They are explicitly excluded from receiving any benefits under this policy.

  

Workers’ Comp Ghost Policy Cost

Ghost policies are cheaper than active workers’ comp policies and their premiums are generally priced as minimum amounts because they do not issue coverage for employees. 

  • Typical Premium Range: Ghost policies are typically priced between $1,000 and $2,000 per year and can go as low as $1,200 in some instances. The actual amount charged would depend significantly on location and industry specifics.

 

Factors Influencing Cost:

  • State regulations: Different states have different regulations around workers’ ghost policies, making the pricing different.
  • Business Classification: The type of operations conducted can determine the rates; the higher the risks, the higher the classes and the corresponding premium.
  • Insurance Provider: Different insurance companies can offer different terms.

How Much is a Ghost Policy?

The cost of purchasing a ghost policy varies based on a whole range of factors:

  • Minimum Premiums: As stated before ghost policies carry minimum premiums as defined by state guidelines. For instance, if there is no payroll and no workers in the company, there is a set amount that the company will be charged.
  • Average Costs by State for ghost policies: For example;

 

State Average Annual Cost
Alabama $1,200
Alaska $1,500
Arizona $1,000
Arkansas $1,200
California Not Allowed
Colorado $1,000
Connecticut $1,500
Delaware $1,250
Florida $1,000
Georgia $1,500 – $1,800
Hawaii $1,200
Idaho $1,000
Illinois $1,200
Indiana $1,000
Iowa $1,200
Kansas $1,000
Kentucky $1,200
Louisiana $1,300
Maine $1,400
Maryland $1,500
Massachusetts Not Allowed
Michigan $1,500
Minnesota $1,200
Mississippi $1,000
Missouri $1,100
Montana $1,300
Nebraska $1,200
Nevada $1,100
New Hampshire Not Allowed
New Jersey Not Allowed
New Mexico $1,000
New York Not Allowed
North Carolina Not Allowed
North Dakota Not Allowed
Ohio Not Allowed
Oklahoma $1,200
Oregon $1,300
Pennsylvania $1,500
Rhode Island Not Allowed
South Carolina $1,250 – $1,550
South Dakota Not Allowed
Tennessee $1,000
Texas $800
Utah $950
Vermont Not Allowed
Virginia $958
Washington Not Allowed
West Virginia $1,100
Wisconsin Not Allowed
Wyoming Not Allowed

 

 

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Cheapest Workers’ Comp Ghost Policy

To attain the best and the most affordable workers’ comp ghost policy, it’s advisable to get numerous insurance quotes and compare the various offers. Here are strategies to ensure you get the cheapest policy;

  • Online Comparison Tools: With websites that specialize in providing multiple insurance quotes to customers, it is easy to compare various providers and find better bargains suitable for business needs.
  • Working with Agents: Approaching an independent insurance agent can be very advantageous in getting a ghost policy, as the agent is a specialist who is aware of the protocols. Such agents usually represent a number of insurance carriers and can obtain more favorable pricing for clients.
  • Bundling Options: There may be or some discounts offered by some ghost policy providers for having other insurance like general liability, which can be significant in cutting costs in the long run.
  • State-Specific Programs: Some states may have low-cost funds or pools to offer ghost policy providers, and it will be useful to check such states if one lives in one.

 

Conclusion

A ghost policy may be a perfect solution for self-employed and independent contractors looking for a way to satisfy workers’ compensation insurance requirements without the expenses associated with employee coverage. Yet, it is important to remember the challenges of these policies, particularly, their non-coverage of policyholders.

For more information on ghost policies or any other policies, contact Insuranks. We provide expert advice, rich comparisons, and options that best meet your needs to find coverage.

 

 

 

 

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