A ghost policy is a workers' compensation policy structure sometimes requested for owner-only contractors who must show proof of workers' comp for a contract or bid. It does not cover the owner for injury; it only places a workers' comp policy on file. Requirements vary by contract, project, and carrier, and it is not right for every contractor. As ContractorsInsured.net (CA Lic #6015321 / TX Lic #3305690), we set up ghost policies plus the general liability most packets also require for California and Texas contractors and issue the certificate right after binding.
No policy yet but a GC wants proof? We set up a ghost policy plus the $1M general liability most packets also require, bind, and issue the certificate right after. Already covered? Send the certificate holder details and endorsement wording and we match it.
What a ghost policy means (plain English)
- It is issued to the business entity so you can provide proof of workers' comp when requested.
- It often involves little to no payroll, depending on your situation and what is allowed.
- It still requires accurate information and can still involve audits and documentation.
Mini definitions
COI: proof of coverage and limits at a point in time. Audit: a review used to confirm payroll and classifications so the carrier can true-up premium. Class code: a classification that affects how payroll is rated. See workers' compensation, COI basics, premium audits, and contractor class codes.
When ghost policies are commonly requested
- A general contractor says they need workers' comp on file before releasing work.
- A property manager or vendor portal will not approve onboarding without WC proof.
- A project packet requires WC documentation even for small subs.
- You are asked for a COI showing workers' comp even though you are owner-only.
Important: requested does not always mean required by law. It is often a contract and compliance requirement, so verify what the packet actually says.
How much does a ghost policy cost?
Why the premium works this way
A standard workers’ compensation premium is built from payroll: your payroll in each class code, multiplied by that code’s rate, then adjusted by your experience modifier. A ghost policy is filed with zero qualifying payroll, because the owner is excluded and there are no employees to insure. With no payroll to rate, there is nothing for the usual calculation to work on, so the carrier charges its minimum premium instead. That is the whole reason the number is small. It is not a discount, and it is not a lesser form of coverage. It is what a workers’ comp policy costs when there is no payroll on it.
What moves the number up or down
- Your class code. A carrier’s minimum premium is not the same for every trade. Higher-hazard classifications carry higher minimums.
- Carrier appetite. Not every carrier wants every trade, and the ones with less appetite price the minimum higher.
- Broker and policy fees. These sit on top of the premium and vary.
- Your state. Workers’ comp is state-regulated, so the floor differs by state.
What our state guides report
Because the floor is set per state and per carrier, we publish the ranges separately rather than quoting one national figure:
- California: roughly $750 to $2,500 a year once class code, carrier appetite and broker fees are accounted for. See how ghost policies work in California.
- Texas: roughly $600 to $2,800 a year. See ghost policies for Texas contractors.
Are ghost policies legal?
What it actually is
A ghost policy is a workers’ compensation policy written at the carrier’s minimum premium for a business with no employees, where the owner is excluded from coverage. It exists so a solo contractor can produce a certificate of insurance for a general contractor, an owner or a vendor portal. It is a compliance instrument, not a benefits instrument. Nobody is covered for injury under it, including you.
Where it is accepted
Availability is set by state and by carrier, so this is not a single national answer:
- California: permitted. One important exception: C-39 roofing contractors and certain other mandatory classifications cannot use this approach. Details in our California ghost policy guide.
- Texas: permitted. See our Texas ghost policy guide.
Where contractors actually get burned
The risk is not that the policy is improper. The risk is that it stops matching how you work. A ghost policy holds only while you are genuinely solo. Bringing on even one helper, including a 1099 day labourer, can break it, and that is usually discovered at audit or at the moment of a claim, which is the worst possible time. If you have people working for you, or the contract requires real benefits for the people doing the work, you are no longer shopping for a ghost policy.
Who should not use a ghost policy
A ghost policy is generally not appropriate if you have employees (including part-time field labor), or your business is paying reportable payroll that should be covered properly. In those cases, a standard workers' compensation policy is the right structure, and trying to use a ghost policy can create audit and coverage problems.
Risks and common misunderstandings
A ghost policy covers me if I get hurt
It does not. It places a policy on file for proof; it is not injury coverage for the owner.
If the portal accepts my COI, I am good
Not always. Acceptance does not change what the policy actually does or what an audit may find.
Audits can still happen
Accurate information still matters; a ghost policy is not exempt from audit and documentation.
Class code and scope mismatches
If your work or payroll does not match the policy, you can have compliance and audit issues.
Subcontractor paperwork can become the real issue
Missing sub COIs and documentation often cause the actual onboarding problem, not the ghost policy itself.
How compliance usually works (COIs and documentation)
What to verify before you request anything
- Is the requirement workers' comp proof, or are they also requesting endorsements (often on GL)?
- Are they requesting coverage for employees, or simply proof of a policy on file?
- Do they require the job address on the COI?
- Do they require specific wording, or is a standard ACORD certificate acceptable?
COI request checklist (to avoid rejections)
- Certificate holder legal name and mailing address
- Job name and jobsite address (if required)
- Deadline, and whether it is same-day needed
- Send-to emails and any CCs
- Upload or paste the requirement page from the packet (highly recommended)
How we help contractors with this
We are an independent broker that helps contractors structure coverage properly and move fast on compliance items like COIs, endorsements, and policy documents. The goal is not to sell you a workaround. It is to confirm whether a ghost policy actually fits your situation, place the right structure, and keep your paperwork bid-ready. If a portal or GC asks for proof of coverage, it usually comes down to workers' compensation and a current COI, alongside general liability on many bids.