What is a Ghost Policy?

A ghost policy is a type of workers' compensation insurance coverage where the owner is excluded, as well as additional employees. This policy does not actually provide workers' compensation benefits unless the employer becomes liable for a contractor or employees. WorkersCompensationShop.com states, "A ghost policy is typically purchased by a subcontractor to satisfy coverage requirements of a general contractor or other entity hiring the subcontractor." These policies are not available in all states.