If you're a sole proprietor or solo subcontractor looking at workers comp insurance options, the first question is always the same: what's this going to cost me?
The good news is that ghost workers comp policies are among the most affordable compliant insurance options available to contractors. But "affordable" covers a wide range, and the actual number you'll pay depends on several factors. This guide breaks down realistic cost expectations for 2026, explains what drives your premium, and shows you how to get the best price.
What Is a Ghost Workers Comp Policy?
Before diving into cost, a quick recap: a ghost workers comp policy is a legitimate workers compensation policy issued to a business where the owner is excluded from coverage. The business has no covered employees — just the owner, who elects to be excluded as permitted by state law.
The policy is real. The carrier is real. The premium is real. But because there are no employees collecting benefits, the cost is dramatically lower than a standard policy covering an actual workforce.
Ghost policies are used primarily by sole proprietors and single-member LLCs who need proof of WC coverage to satisfy a licensing board requirement or a general contractor's certificate demand, without the expense of covering employees they don't have.
Average Premium Ranges in 2026
Ghost workers comp policies generally run between $800 and $2,500 per year. Most solo contractors in low-to-medium risk trades land in the $900 to $1,600 range.
Here's a rough breakdown by risk category:
Low-risk trades (painting, finish carpentry, flooring, landscaping, cleaning services):
- Typical annual premium: $800 to $1,200
Medium-risk trades (general carpentry, drywall, concrete, HVAC installation, plumbing):
- Typical annual premium: $1,100 to $1,800
Higher-risk trades (roofing, structural steel, tree trimming, demolition):
- Typical annual premium: $1,600 to $2,500+
These ranges are for owner-excluded policies where the minimum reportable payroll is used. Some states have a minimum premium floor — meaning no matter how small the policy, the carrier charges at least a set dollar amount per year. That floor is often in the $400 to $600 range, which is why ghost policy premiums rarely dip below $800 even for the lowest-risk work.
What Drives the Cost of a Ghost Policy?
Five main variables determine what you'll pay.
1. State of Operation
Workers comp is regulated at the state level, and each state has its own rate tables, class code loss histories, and minimum premium rules. A roofer in Florida pays more than a roofer in Colorado, not because the work is different but because Florida's WC loss history and regulatory environment produce higher base rates.
States with notoriously higher WC costs include California, New York, New Jersey, Florida, and Montana. States with consistently lower rates include Texas (unique WC system), Indiana, North Carolina, and Virginia.
If you work across multiple states, you may need a policy that lists each state in the "Other States" endorsement. This can slightly increase the premium but protects you if you do a job out of state.
2. Trade Classification (NCCI Class Code)
Every trade gets assigned a class code by the National Council on Compensation Insurance (NCCI) or a state equivalent. These codes carry different base rates per $100 of payroll, calculated from decades of claims data.
Roofing (class 5551) has one of the highest rates in the industry — often 20% to 30% or more per $100 of payroll — because falls and injuries are common. Painting interiors (class 5474) is far lower. When you're applying for a ghost policy, the carrier calculates your premium based on your class code applied to the minimum reportable payroll.
Using the wrong class code — intentionally or not — is called misclassification and can result in policy cancellation. Be accurate when describing your work.
3. Coverage Limits
Standard ghost policies come with employer's liability limits of $100,000/$500,000/$100,000 (known as 1/5/1 limits). These limits show up on your certificate as Part 2 coverage.
Some general contractors and project owners require higher limits — $500,000/$500,000/$500,000 or $1,000,000/$1,000,000/$1,000,000. Bumping limits up increases your premium modestly, usually by $50 to $200 per year depending on the carrier.
If your GC specifies minimum limits in the contract, check them before binding your policy. Issuing a new certificate with corrected limits is possible but adds friction.
4. State Minimum Payroll Requirements
Even on an owner-excluded policy, some states have a minimum payroll that must be reported and rated against. This is a statutory number — not your actual earnings. It exists so that the policy is technically tied to a minimum exposure level.
These minimums vary by state and are usually updated annually. In some states it's $0 for an excluded owner. In others it might be $16,000 or $22,000 per year — even if you're personally excluded. This state-mandated minimum payroll is one reason premiums don't go to zero even on a ghost policy.
5. Carrier and Filing Fees
Different carriers price the same risk differently, and platforms charge different policy fees. When comparing quotes, look at the total annual cost — premium plus fees — not just the base rate. A lower premium with a $250 processing fee might cost more than a slightly higher premium with a $50 fee.
Ghost Policy vs. Standard Workers Comp: Cost Comparison
To understand why ghost policies are attractive, it helps to compare them to what a real payroll policy would cost.
A sole proprietor who includes themselves in coverage is typically rated at the state's minimum owner payroll (often $40,000 to $60,000 per year in most states). Apply even a moderate class code rate of 3% to $50,000 of payroll, and you're looking at $1,500 in premium — before any experience modifications or fees.
For high-risk trades, a self-included owner policy can easily run $5,000 to $12,000 per year. A ghost policy at $1,200 to $2,500 covers the compliance requirement at a fraction of that cost.
The trade-off is real: a ghost policy does not provide you — the owner — with actual WC benefit coverage if you're injured on the job. If you fall off a roof and break your leg, your ghost policy doesn't pay your lost wages or medical bills. That's the explicit trade you're making when you elect owner exclusion.
Many contractors manage this by carrying a personal health insurance policy and an accident/disability policy instead. The combination is often still less expensive than a full self-included WC policy.
How to Lower Your Premium
Even within a narrow category, there's room to pay less. Here's how.
Describe your work accurately — but precisely. If you do both framing and finish carpentry, the carrier will assign the higher-rated code if they're uncertain. Being specific about what you primarily do can result in a lower class code.
Choose the right coverage territory. If you're primarily licensed in one state and only occasionally do jobs in a neighboring state, confirm whether you actually need the "Other States" endorsement for that second state. Sometimes you don't, and removing it drops the premium.
Avoid minimum premium traps. Some carriers have steep minimum premiums that make small ghost policies uncompetitive. Shop across carriers — the same policy can cost $300 to $500 more at one carrier than another purely because of how they set their minimums.
Pay annually. Monthly installment plans often carry fees that add 5% to 12% to your total annual cost. If cash flow allows, paying the full year upfront is almost always cheaper.
Renew on time. Letting a policy lapse and buying a new one can trigger new policy fees and sometimes a higher rate. Continuous coverage with the same carrier can result in lower rates over time.
Why Ghost Policies Are Often the Cheapest Compliant Option
Here's the key word: compliant. A ghost policy isn't a workaround. It's a fully compliant insurance instrument for a business that legitimately has no covered employees.
For sole proprietors who need to satisfy a licensing or contractual WC requirement without the cost of covering a workforce that doesn't exist, the ghost policy is purpose-built for that situation. Alternatives — like being added to a GC's policy, purchasing a minimum-employee policy, or simply hoping no one checks — either don't exist, cost more, or create legal exposure.
At $900 to $1,600 per year for most contractors in standard trades, a ghost policy costs roughly $75 to $130 per month. That's a straightforward business expense that keeps your license active, keeps you on job sites, and keeps your contracts moving.
Get an Accurate Quote Now
Premium estimates only go so far. Your actual cost depends on your specific state, your trade, and the carrier. The fastest way to know your number is to start a quote — it takes under five minutes and there's no obligation.
Enter your business details, get your price, and decide from there. For most solo contractors, the number is lower than they expected.