Unbiased contractors have one thing of a grey space on the subject of staff’ comp insurance coverage. You don’t have staff, but purchasers might require you to hold a coverage earlier than beginning work. Getting a full staff’ comp coverage may be fairly costly and pointless in your scenario.
Ghost insurance policies supply an answer – offering the protection you want at a decrease price. On this fast information, we’ll clarify what ghost insurance policies are, who they profit, and issues to think about earlier than getting one.
A ghost coverage is a particular sort of staff’ comp protection designed for unbiased contractors and sole proprietors who don’t have staff however want proof of insurance coverage. It offers the certificates of protection purchasers need with out making you pay for a full coverage.
Ghost insurance policies don’t truly present any actual insurance coverage. They received’t cowl you when you get injured on the job. As an alternative, they merely provide you with a certificates displaying you’ve got met state staff’ comp necessities or shopper calls for.
There are two most important causes an unbiased contractor may want a ghost coverage:
1. State regulation requires proof of staff’ comp, even for solos. Some states demand all companies present they supply protection for any potential staff.
2. Purchasers need assurance you’re coated. Common contractors typically make subs present proof of staff’ comp to guard themselves. For those who employed assist and somebody obtained damage, they might in any other case be liable.
With out staff, the coverage received’t pay out claims. But it surely satisfies authorized and shopper necessities for proof of protection.
Ghost insurance policies don’t present any actual protection. Consider them like “placeholder” insurance policies. They merely provide you with a certificates of insurance coverage to indicate purchasers and state regulators.
For those who do find yourself hiring staff in the course of the coverage interval, you received’t essentially have protection for them. Any staffers would wish their very own correct insurance coverage. Ghost insurance policies are solely meant as proof you may provide staff’ comp if wanted later.
Sadly, no. Some states don’t enable ghost insurance policies in any respect or have strict guidelines round them. You’ll must test together with your state staff’ comp bureau to make sure they’re accepted the place you reside and work.
Some states additionally require even solo entrepreneurs to hold actual staff’ comp insurance policies, not ghost protection. You’ll want to examine your individual state’s legal guidelines earlier than assuming you will get a ghost coverage.
Questioning the place to get a ghost coverage? In most states permitting them, you may work with any insurance coverage agent or dealer licensed to promote staff’ comp in your space. Be clear you need ghost protection, not an actual coverage, they usually can assist you safe it.
You may as well work with insurtechs like Cerity, who supply simple on-line quotes for ghost insurance policies and different gentle staff’ comp merchandise. Simply reply a number of questions and you may typically get same-day protection.
As an unbiased contractor, having a ghost coverage may be essential for touchdown purchasers and complying with state legal guidelines. Simply bear in mind it doesn’t truly cowl you – it merely offers proof of protection in case you broaden later. Test in case your state permits ghost insurance policies and join with a licensed staff’ comp agent or insurer to safe the protection you want.
Kenneth is a proud native of sydney, born and raised there. Nevertheless, he pursued his schooling overseas and studied in Australia. Kenneth has labored as a journalist for nearly a decade, making precious contributions to outstanding publications akin to Yahoo Information and The Verge. Presently, he serves as a journalist for The Hear Up, the place he focuses on overlaying local weather and science information. You possibly can attain Kenneth at [email protected].