What is a Workers’ Comp Ghost Policy and When Do I Need One?

Landing bigger jobs. Building client trust. Growing your business. Those are just some of the benefits of a workers’ comp ghost policy.

If you’re a sole proprietor or independent contractor with no employees, a ghost policy can be a simple, affordable way to show you’re covered, stay compliant, and win more jobs.

In this guide, we’ll explain what a ghost policy is, when a small business owner might need one, and how to get covered.

What Is a Ghost Policy and What Does It Cover?

Is A Workers’ Comp Ghost Policy Right For Me?

Workers’ compensation insurance typically covers medical bills and lost wages for employees who get injured or sick on the job. And in most states, it’s required if you have staff.

But if you’re a business without employees, paying for full workers’ comp may feel unnecessary — until a client, contractor, or state agency asks for proof of insurance coverage.

A workers’ comp ghost policy can solve that problem. It’s a special type of policy designed for sole proprietors and independent contractors who don’t need full coverage but still need some proof of workers’ comp coverage to:

• Meet state requirements
• Satisfy client or contractor demands
• Demonstrate professionalism and protect partnerships

It’s called a “ghost policy” because it provides a document of insurance without actually insuring any workers.

Unlike a full workers’ compensation policy, a ghost policy doesn’t cover your injuries  — but it gives you the documentation you may need to stay competitive and compliant, and remove any liability for your client.

Here’s a quick look at how a ghost policy compares to full workers’ comp coverage:

Ghost policy vs. full workers’ compensation insurance

	Ghost Policy	Full Workers’ Comp
Covers Workplace Injuries	No	Yes
Provides a Proof of Insurance	Yes	Yes
Typical Annualized Cost	Lower premium	Higher premium
Purpose	Compliance	Compliance & Employee Protection

When a Workers’ Comp Ghost Policy Makes Sense

The real value of a ghost policy comes down to what it can do for your business — helping you land more projects, build trust with clients, and stay compliant without the cost of full coverage.

Here’s when a ghost policy may make sense for you:

Bid on and win more work.

Bigger jobs often come with more requirements. Many general contractors, corporate clients, and even homeowners expect to see a Certificate of Insurance showing a workers’ comp policy before you can start a project.

A ghost policy gives you that proof — so you can submit bids with confidence, meet contract terms, and unlock more opportunities that might otherwise be out of reach.

Keep your costs manageable.

Full workers’ comp coverage is designed for businesses with employees or for owner-only businesses that want extra protection.

For solo business owners, a ghost policy may provide a lower-budget alternative to a full workers comp policy.

Build trust with clients.

When you provide a ghost policy, you’re assuring clients — whether it’s a job site owner or a homeowner — that they won’t be held responsible for any claims if you get sick or hurt on the job. It shifts the risk of injuries to you and away from your clients.

That reassurance can set you apart from competitors who can’t provide the same level of transparency.

Stay compliant and avoid surprises.

Your clients might not require workers’ comp coverage, but some states still do — even for one-person operations. Make sure to confirm whether your state laws allow ghost policies before purchasing one.

A ghost policy makes compliance simple and helps you avoid unexpected setbacks like rejected bids, project delays, or potential fines — keeping your business moving forward.

Is a Workers’ Comp Ghost Policy the Right Fit for Me?

Imagine you’re an independent electrician in Alabama bidding on a subdivision project, a freelance IT consultant in Florida landing a cybersecurity contract, or a solo business consultant in Massachusetts applying for a government grant. In each case, you may need to show proof of workers’ comp coverage — even though you don’t have employees.

That’s where a ghost policy comes in — giving you the coverage documentation clients, contractors, or agencies may require at a lower cost.

Here are the most common situations where a ghost policy makes sense:

• State Requirements — Some states may require workers’ comp coverage even if you don’t have employees. Where authorized, a ghost policy keeps you compliant, often at a lower premium than a full workers’ comp policy.  
• Contractual Obligations — If a client, general contractor, or partner requires proof of insurance, a ghost policy lets you provide a Certificate of Insurance and keep projects moving.
• Cost Barriers — Some insurers require a minimum premium to issue full workers comp policies. If your business doesn’t meet that threshold, a ghost policy can still provide the Certificate of Insurance you need. 

How Do I Get A Ghost Policy?

At Simply Business, we know you’re too busy to spend hours researching insurance questions such as how to get a ghost policy. And we’re here to help make it quick and painless.

Just answer a few questions about your business online, and we’ll show you your options. Prefer to talk it through? Call our licensed agents Monday through Friday, 8 a.m. to 8 p.m. at (855) 869-5183.

You’re Not Alone

Running a small business can be overwhelming — but you don’t have to do it alone. At Simply Business, we’re here to help with more than just insurance. Our Resource Center offers guides, tools, and tips to support your growth:

• Workers’ Comp Insurance for LLCs and Sole Proprietorships
• Workers’ Compensation Insurance for Self-Employed People
• 4 Milestones in Workers’ Comp Law in U.S. History

With the right information, resources, and coverage, you can protect your business, build client trust, and grow your business.