Impartial contractors have one thing of a grey space in the case of employees’ comp insurance coverage. You don’t have staff, but shoppers could require you to hold a coverage earlier than beginning work. Getting a full employees’ comp coverage could 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 employees’ comp protection designed for impartial contractors and sole proprietors who don’t have staff however want proof of insurance coverage. It gives the certificates of protection shoppers need with out making you pay for a full coverage.
Ghost insurance policies don’t really present any actual insurance coverage. They gained’t cowl you if you happen to get injured on the job. As an alternative, they merely offer you a certificates displaying you may have met state employees’ comp necessities or shopper calls for.
There are two foremost causes an impartial contractor would possibly want a ghost coverage:
1. State regulation requires proof of employees’ 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 employees’ comp to guard themselves. For those who employed assist and somebody received damage, they may in any other case be liable.
With out staff, the coverage gained’t pay out claims. Nevertheless it 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 offer you a certificates of insurance coverage to point out shoppers and state regulators.
For those who do find yourself hiring staff through the coverage interval, you gained’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 possibly can provide employees’ comp if wanted later.
Sadly, no. Some states don’t permit ghost insurance policies in any respect or have strict guidelines round them. You’ll have to test together with your state employees’ comp bureau to make certain they’re accepted the place you reside and work.
Some states additionally require even solo entrepreneurs to hold actual employees’ comp insurance policies, not ghost protection. Make sure you examine your personal 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 possibly can work with any insurance coverage agent or dealer licensed to promote employees’ comp in your space. Be clear you need ghost protection, not an actual coverage, they usually may also help you safe it.
You may also work with insurtechs like Cerity, who supply simple on-line quotes for ghost insurance policies and different gentle employees’ comp merchandise. Simply reply a couple of questions and you may typically get same-day protection.
As an impartial contractor, having a ghost coverage could be essential for touchdown shoppers and complying with state legal guidelines. Simply bear in mind it doesn’t really cowl you – it merely gives proof of protection in case you increase later. Test in case your state permits ghost insurance policies and join with a licensed employees’ 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 training overseas and studied in Australia. Kenneth has labored as a journalist for nearly a decade, making invaluable contributions to outstanding publications comparable to Yahoo Information and The Verge. At present, he serves as a journalist for The Hear Up, the place he focuses on masking local weather and science information. You possibly can attain Kenneth at [email protected].