The Workers’ Compensation Ghost Policy
What is a Ghost Policy?
A ghost policy is a workers’ compensation insurance policy that is generally purchased by a business owner with no employees in order to meet coverage requirements, where the business owner excludes themselves from receiving workers’ compensation benefits in the event of a work injury. Since no real benefits are expected, it is a “ghost policy”.
When is a Ghost Policy Requested?
The most common reason a business owner will request a ghost policy is for the purpose of meeting workers’ compensation coverage requirements so that they may do business with other contractors or businesses. Under Virginia law, a contractor that hires one or more subcontractors with employees to perform the same trade, business or occupation or fulfill a contract of the business is the statutory employer of the subcontractor’s employees. The insurance carrier is not privy to a subcontractor’s records, so they can charge the contractor premium for any subcontractors that do not have their own policy, thus the policy requirement. A general contractor should always request proof of coverage from all subcontractors.
To obtain a quote please visit Ghost Policy Quote or call (804) 320-2886.