A ghost policy is a type of coverage that allows certain sole proprietorships to meet their legally mandated workers' compensation requirements. Unlike other workers' compensation programs, you cannot make a claim through a ghost policy. While an insurance policy that does not allow claims may sound counter-intuitive, if you are a self-employed business owner with no employees eligible to make a claim against you, then a ghost policy may be a convenient option that will help you save money on your insurance costs. Learn how ghost policies work, what their benefits are, and how you can use one to start bidding on and winning better contracts today.
What is a Ghost Policy?
Most states require businesses to carry workers' compensation coverage for their employees. In other instances, a contractor may be asked to provide proof of workers' compensation insurance to bid or begin work on a specific job. However, many contractors and sole proprietorships have no employees aside from the self-employed owners themselves. In such situations, purchasing a robust workers' compensation policy can be both prohibitively expensive and unnecessary. That's where ghost policies come in.
A ghost policy is technically a form of workers' compensation, but it does not cover the owner and is exclusively designed for sole proprietorships that have no employees. This means that claims cannot be made through a ghost policy, which helps keeps costs down so that you can get the proof of coverage you need without the additional expense of a full workers' compensation policy.
Please note that ghost policies are currently only available in the following states and districts:
- District of Columbia
- New Hampshire
- North Dakota
- South Carolina
- South Dakota
- West Virginia
Why Get a Ghost Policy?
If you can't actually make a claim under a ghost policy, then you may be wondering what the point of such a policy is in the first place. For the businesses that qualify, there are several benefits. The biggest one is cost. Since workers' compensation premiums are based on payroll, a ghost policy would obviously be much cheaper than workers' compensation for sole proprietorships that have no employees. A ghost policy also has benefits when it comes to winning contracts, especially for construction companies. Many construction contractors carry ghost policies so that they can provide proof insurance when bidding on new jobs. Having this proof of insurance is often a minimum requirement for applying for many contracts. Contractors need to be aware, however, that if they have a ghost policy and hire a subcontractor, they need to ensure that the subcontractor carries their own workers' compensation.
How to Get a Ghost Policy
If you think a ghost policy could be helpful in your situation, then request your free quote from AmVenture today. One of our representatives will assess your situation and help you determine whether or not a ghost policy could help you save on insurance costs while allowing your business to grow.
Call (877)813-8518 to Get Your Ghost Policy Insurance Quote Today!