How Much Does a Ghost Policy Cost?

Ghost sitting at desk
Mordechai Kamenetsky
Last Updated: 
February 2, 2024

Typically, a ghost policy cost is around $1,000, although prices may vary depending on the insurance carrier and coverage options. Some carriers that offer ghost policies also provide pay plans, while others may not.

Understanding Ghost Policies

What is a Ghost Policy?

A ghost policy is a workers' compensation policy designed for businesses with no employees, where the owner is excluded from coverage. 

If you're a sole proprietor or independent contractor, a ghost policy might be a suitable choice for you. It allows you to provide a certificate of insurance for jobs without paying for a full policy that may be unnecessary for your situation.

What kind of business owners can benefit from a Ghost Policy?

Ghost policies are ideal for business owners who:

  • Have no employees
  • Need to provide a certificate of insurance to win contracts
  • Want a cost-effective workers' comp policy
Many professionals, such as contractors and freelancers, can benefit from a ghost policy as it helps them meet clients' insurance requirements without breaking the bank. It's important to note that while these policies offer proof of insurance, they don't provide actual workers' compensation coverage for the owner. 

What factors influence the cost of a Ghost Policy?

While ghost policies are typically more affordable than traditional workers' comp policies, various factors can influence the cost. Here are some key components affecting the final premium:

Business Risk

Business Risk: The level of risk associated with your industry can impact your policy cost, with higher risk industries attracting higher premiums.


Location: Different states have different minimum premium and workers' compensation requirements, which may affect the cost of a ghost policy.

Policy Period

Policy Period: The duration of your policy will impact the overall cost. A longer policy period can result in a higher premium.

Carrier Payment Options

Carrier Payment Options: Some insurance carriers offer pay plans, making it more convenient to manage your premium payments, whereas others may require payment upfront or with limited payment options 

Acquiring and Managing Ghost Policies

How can I get a Ghost Policy? 

To obtain a ghost policy, follow these simple steps:

  1. Determine if you're eligible: A ghost policy is suitable for businesses that have no employees. Sole proprietors, one-person businesses, and partnerships might benefit from this type of policy.
  2. Consult with an insurance agent: They can help you understand your specific state requirements and help you find insurance carriers that offer ghost policies in your market.
  3. Get a quote: Typical costs for a ghost policy often revolve around $1,000, but can vary depending on your situation. Some carriers have pay plans.
  4. Submit an application: Provide necessary information such as a description of your work, class code, and payroll.
  5. Obtain your certificate of insurance (COI): Once your policy is approved, you'll receive a COI as proof of insurance, which is often required by general contractors or clients.

How can I save money on a Ghost Policy?

Ghost policies can help you maintain compliance and peace of mind while protecting your cash flow. Here are a few tips to save on insurance costs:

Shop around

Shop around: Get quotes from multiple carriers to find a policy that fits your budget.

Bundle your policies

Bundle your policies: Combining ghost policies with other commercial insurance products might offer discounts.

Maintain accurate payroll records

Maintain accurate payroll records: Ghost policies are often audited, and accurate payroll records help demonstrate that you meet the policy requirements.

Remember, a ghost policy can provide adequate coverage while meeting contract and state insurance requirements, allowing you to focus on growing your business.

Frequently Asked Questions

How can small businesses benefit from ghost insurance policies for workers' compensation?

Small businesses can benefit from ghost policies because they help meet legal requirements and satisfy some clients' demands for proof of coverage. 

While ghost insurance policies do not provide actual coverage, they may still satisfy a contract that requires workers’ comp coverage by preventing the business from submitting a workers’ compensation claim with the insurance company, thereby safeguarding the individual hiring you.

How does a ghost policy audit affect small businesses, and what can they do to prepare?

During a ghost policy audit, insurance carriers examine the policy to ensure everything is accurate and complies with relevant regulations. Small businesses may need to provide documentation that proves they have no employees covered by the policy or that the work they perform falls within its scope. 

To prepare for a policy audit, maintain accurate and up-to-date records and ensure your policy complies with any applicable state or federal regulations. Being diligent and proactive can help minimize the potential impact of an audit on your small business and avoid any surprises.

What should businesses understand about ghost policies?

Ghost policies serve to meet legal requirements and appease clients who need proof of insurance. However, they do not provide actual workers' compensation coverage, which could expose a business to potential liability if an accident occurs. Business owners and self-employed individuals should consider their specific needs, legal requirements in their state, and potential risks before deciding whether a ghost policy is appropriate. 

It's important to keep in mind that depending on the state and industry, having a ghost policy might not offer sufficient legal protection or satisfy licensing boards' requirements.

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Looking for a policy? Start with Kickstand now! 

Whether you need to meet state regulations, client demands, or are considering coverage options, an instant quote can give you a quick and precise estimate customized to your needs. Don't risk leaving your business vulnerable; get a quote today to ensure you have the appropriate protection in place.

Note: The information provided in this blog is intended for general informational purposes only and is not a substitute for professional legal or insurance advice. Laws and regulations regarding workers' compensation insurance are complex and vary by state and by specific circumstances. Therefore, readers are encouraged to consult with a qualified legal or insurance professional to obtain advice with respect to any particular issue or problem they might have.

Mordechai Kamenetsky

Mordechai Kamenetsky, co-founder and lead agent of Kickstand, is recognized as an expert in workers' compensation. He is passionate about helping small businesses manage risks and lower their workers' comp costs. In his articles, he educates readers and clients on the intricacies of workers' comp insurance.

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