California requires businesses, including licensed contractors, to carry Workers’ Compensation insurance. Even if you’re a sole proprietor with no workers, your clients may ask to see proof of insurance. With CCIS, you can meet state requirements and land more jobs. Following is an overview of our Ghost policy and Workers’ Comp solution for paper general contractors (GCs):
What is a Ghost Policy?
A Ghost Policy is a special type of Workers’ Compensation insurance designed for sole proprietors and independent contractors who have no employees but must meet contractual obligations with clients. This policy provides proof of Workers’ Compensation coverage but does not offer any coverage or benefits. You cannot make any claims against the policy.
Why would I need a Ghost Policy if I have no employees?
Clients often require proof of Workers' Compensation insurance before allowing you to start a project, even if you’re a sole proprietor. Additionally, in 2023, California implemented a new law mandating that all licensed contractors maintain Workers’ Compensation insurance, regardless of whether they have employees. This legislation, SB 216, signed into law in late 2022, is being rolled out in phases and will require full compliance from all licensed contractors by January 2026.
A Ghost Policy helps you meet these requirements, making you eligible for more jobs and giving you a competitive advantage over other contractors who cannot provide proof of insurance.
Is a Ghost Policy cheaper than traditional Workers' Compensation insurance?
Ghost Policies are generally less expensive than standard Workers’ Compensation insurance because they do not provide coverage or benefits. These policies are designed to help you meet client requirements at a lower cost.
What happens if I hire employees?
If you hire employees, you must update your policy to reflect traditional Workers' Compensation coverage. CCIS can assist you in transitioning to a full Workers’ Compensation plan, ensuring that you’re covered for employee on-the-job injuries. Just contact us to update your policy to a traditional Workers’ Compensation plan.
Do you offer Workers’ Compensation for paper general contractors?
CCIS offers a Workers’ Compensation solution for paper general contractors – those who manage projects without a formal payroll but have a high subcontractor exposure (over 50% to 100%). Our program is specifically designed for GCs in this unique situation, providing the necessary coverage to meet project and contractual needs.
*NOTE: The insuring agreement in a policy sets out the covered perils, assumed risks, and nature of coverage that the insurance company provides to its insured in exchange for the premiums paid. Thus, the terms and conditions of the policy will dictate whether coverage exists and the nature of any potential benefits.