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Ghost Workers Comp Policies for 1099 Contractors

A ghost policy lets solo contractors satisfy insurance requirements without paying for coverage they don’t technically need.

• ✓Provides a valid COI with no actual payroll
• ✓Owner excluded — premium is based on minimum payroll floor
• ✓Available in most states for sole proprietors and single-member LLCs
• ✓Costs $500–$1,500 annually depending on state and trade

Or call (234) 231-8427 — Mon–Fri, 9 AM–5 PM EST

What Is a Ghost Workers Comp Policy?

A ghost policy is a workers compensation policy where the business owner excludes themselves from coverage. Because the policy has no covered employees and the owner has filed an exclusion, there is no meaningful payroll to rate the policy on — the carrier charges a minimum premium instead.

The result is a valid workers comp policy with a Certificate of Insurance showing your coverage, satisfying GC requirements, state licensing requirements, or client contracts that demand proof of workers comp — all without paying full coverage rates on your income.

Ghost policies are legitimately used by sole proprietors, owner-operators, and single-member LLCs who work alone and don’t have W-2 employees. They are not a workaround or a trick — they are a recognized coverage structure specifically designed for this situation.

Who Should Get a Ghost Policy?

Solo contractors who need a COI to bid on jobs are the primary users. Many GCs require every subcontractor to show workers comp coverage regardless of whether they have employees. A ghost policy satisfies that requirement at a fraction of the cost of a full policy with payroll.

Sole proprietors who are legally exempt from workers comp requirements in their state but whose clients or licensing board still require proof of coverage benefit from ghost policies. State exemption means you don’t have to carry coverage — but your clients don’t have to hire you without it.

Ghost policies do not make sense if you have W-2 employees. The moment you have employees, you need to cover their payroll on the policy regardless of your owner exclusion. A ghost policy that excludes the owner but covers employees is just a normal workers comp policy with an owner exclusion endorsement.

How Ghost Policy Premiums Are Calculated

Because there’s no payroll to rate against, ghost policy premiums are based on a minimum reportable payroll floor set by the state or carrier — typically $500 to $52,000 annually. The carrier applies your class code rate to this minimum payroll, resulting in a premium often between $500 and $1,500 per year.

The exact premium depends on your state, your trade classification, and the carrier. Roofing ghost policies cost more than painting or drywall because the class code rate is higher even at minimum payroll. Some states have higher minimum floors that push premiums toward $2,000 or more.

Ghost policies do not carry an experience mod surcharge in most cases — because there’s no meaningful loss history to rate against when there are no covered employees.

State Availability and Restrictions

Ghost policies are available in most states, but a handful restrict or complicate them. Texas is a notable exception — it’s a non-compulsory state for most private employers, which changes the dynamics entirely. Some states require the exclusion to be filed with the state workers comp board before the COI can show the owner excluded.

In states like Florida, the exclusion rules for the construction industry are particularly strict. Corporate officers in construction must actively file an exemption with the state, and the exemption has annual limits on the number of officers who can exclude.

Always confirm state-specific exclusion rules with your agent before assuming a ghost policy will satisfy a specific GC or licensing requirement. Some GCs specifically check whether an exclusion is on file and may not accept a ghost policy from states that don’t allow binding exclusions.

Getting a COI from a Ghost Policy

Once your ghost policy is bound, you receive a Certificate of Insurance just like any other workers comp policy. The COI shows the carrier name, policy number, effective and expiration dates, and coverage type — workers compensation.

The exclusion endorsement is listed on the policy but typically does not appear on the standard ACORD 25 certificate. If a GC specifically asks whether you have employees covered, be honest — but the COI itself legitimately evidences a workers comp policy in force.

We issue COIs the same day for ghost policy clients — often within the hour. If you need to start a job tomorrow and the GC requires workers comp documentation, call us today.

Why Contractors Use Trade Safe Insurance

Frequently Asked Questions

Related Resources

Sole Proprietor Workers Comp Coverage
Workers Comp for LLCs, S-Corps, and Partnerships
Workers Comp Exemptions by State
Workers Comp Cost for Contractors

Need a Ghost Policy COI Today?

We bind ghost policies same day and have your certificate ready within the hour. No employees required — just tell us your trade and state.