North Carolina Workers’ Comp Ghost Policy [2024 Updated]

The state requires almost every employer to have workers’ compensation insurance. However, there are specific rules for certain types of employers, including those that have no employees and are operated by their owners. A North Carolina workers’ comp ghost policy may be necessary for such businesses, and it is important to understand what this type of workers’ compensation insurance policy entails.

What Is a North Carolina Workers’ Comp Ghost Policy?

Many business owners throughout the state network with other businesses and contractors to complete their operations. In some cases, a business owner will need to provide a certificate of insurance proving that they have met the state’s workers’ compensation insurance requirement. However, it does not make sense for an employer with no employees to pay for coverage they do not actually need. This is where a North Carolina workers’ comp ghost policy can be effective.

In order to secure the certificate of insurance, the employer can purchase a workers’ comp ghost policy. This policy does not extend coverage or benefits to the employer and is typically offered at a low premium cost. The policy provides the employer with the certificate of insurance that they will need as proof of insurance for various interactions with other companies in the state.

When to Purchase Standard Workers’ Compensation Insurance

If you own a business and have no employees in the state, a workers’ comp ghost policy may be all you need for the time being when it comes to securing proof of insurance. However, if your operation grows and you need to hire employees, you will need to secure standard workers’ compensation insurance or risk facing severe legal penalties. Companies can be fined and shut down until they can show proof of appropriate insurance coverage.

Workers’ compensation exists to protect both business owners and their employees. A covered employer typically isn’t liable for their injured workers’ damages, and the insurance policy will provide a financial safety net to the injured worker after they are hurt while working. As long as an injury occurs while the employee is performing their job duties, the employee will likely qualify for workers’ compensation benefits.

It is important to remember that fault does not factor into most workers’ compensation cases. It is possible for a worker to have caused their own injury and still qualify for benefits. However, if they violated workplace safety regulations, engaged in horseplay at work, or were working under the influence of drugs or alcohol, these factors could disqualify them from workers’ compensation benefits.

Employers required to have workers’ compensation insurance in the state must ensure their policies meet the state’s coverage requirements. The price of maintaining a workers’ compensation insurance policy will typically depend on the number of employees and the overall risk level of the type of work they do. If you are unsure whether a workers’ comp ghost policy is appropriate for your situation, consult an attorney as quickly as possible.

FAQs

Q: How Much Does a North Carolina Workers’ Comp Ghost Policy Cost?

A: The cost of a workers’ comp ghost policy is typically quite low, with an annual premium that would be far less than an employer would likely be required to pay even if they had to insure a single employee. Every insurance carrier offers different rates, and it is important for an employer to secure a ghost policy that will provide them with the certificate of insurance that they need for their business.

Q: What Coverage Does a Workers’ Comp Ghost Policy Include?

A: A workers’ comp ghost policy does not include any coverage. This type of policy is only available to an employer who does not have any employees and has no plans to hire employees during the policy term. The policy does not cover the employer in the event of a work-related accident, nor will it provide any benefits. The sole purpose of a North Carolina workers’ comp ghost policy is for the employer to secure a certificate of insurance.

Q: What Happens if a Business Owner Suffers an Injury From Work With a Ghost Policy?

A: If a business owner suffers an injury from work and has a North Carolina workers’ comp ghost policy, this policy will not work like other workers’ compensation insurance and will not provide any coverage or benefits to the injured business owner. They will likely need to use their own personal health insurance to cover the cost of their injury. The only purpose a North Carolina workers’ comp ghost policy serves is to provide a certificate of insurance.

Q: What Happens if I Need to Hire an Employee if I Have a Ghost Policy?

A: If you have a ghost policy and need to hire an employee before your insurance term ends, you will need to notify your insurer immediately and then purchase a workers’ compensation insurance policy that provides the required coverage to your employee. There may be a fee if you need to cancel a ghost policy before the policy term ends, but it is crucial that you do not hire any employees unless you can cover them with workers’ compensation insurance.

Q: Can a Self-Employed Person Buy Workers’ Compensation Insurance?

A: Yes, it is possible for a self-employed person to buy workers’ compensation insurance. Most insurance carriers base their policy premiums on the number of employees and the total scope of benefits. It’s important for a self-employed person to weigh the cost and potential benefits of workers’ compensation insurance versus personal health insurance. Workers’ compensation may provide disability benefits that make up for lost income after an injury at work.

The team at Ayers, Whitlow & Dressler have years of professional experience handling all types of complex work injury cases for clients in Charlotte and surrounding communities. If you are a business owner in need of a North Carolina workers’ comp ghost policy or if you are an injured worker who believes their employer has not met their insurance requirements, we can help. Contact us today to schedule a free consultation with our team.