Florida Workers' Comp Ghost Policy

What Is a Ghost Policy?

A "ghost policy" is a workers' compensation policy issued to a sole owner or sole proprietor who has filed a construction exemption with the Florida Department of Financial Services (DFS). Because the owner is exempt, the policy technically covers zero employees — the owner is excluded, and there are no other workers on payroll. The policy exists on paper, an ACORD 25 certificate of insurance can be issued from it, but no one is actually covered under that policy for workers' comp benefits.

The name captures exactly what it is: a policy with no real covered parties. It is a paperwork instrument, not a safety net. The sole purpose is to satisfy certificate-of-insurance requirements imposed by general contractors, property owners, or construction managers who will not allow uninsured subcontractors on a job site regardless of whether those subs have valid exemptions on file.

Florida law permits sole proprietors in the construction industry to file an exemption from workers' comp coverage under Chapter 440, Florida Statutes. The exemption is legitimate and widely used. But that exemption, while valid under state law, does not produce a certificate of insurance — and certificates of insurance are what GCs and their compliance departments demand. The ghost policy bridges that gap.

Why GCs Require Certificates Even from Exempt Sole Owners

General contractors in Florida face direct liability exposure if an uninsured subcontractor — even a legitimately exempt sole owner — is injured on their job site and cannot collect workers' comp benefits. Florida's "contractor liability" provisions under Section 440.10, F.S. mean that a GC can be held responsible as the "statutory employer" for uninsured subcontractors working beneath them. If the sub has no WC coverage, the GC's carrier may end up paying the claim — and then auditing the GC's policy for the sub's payroll, which dramatically increases the GC's premium.

Because of this exposure, most commercial GCs have blanket compliance policies requiring a certificate of insurance showing workers' comp coverage from every subcontractor, regardless of size. Their compliance departments often do not distinguish between a legitimate exemption and no coverage at all. A certificate naming a carrier, showing a policy number, and listing effective dates satisfies their systems. An exemption certificate from DFS usually does not.

This dynamic creates genuine demand for ghost policies among sole proprietors who work as subcontractors and need continuous access to GC job sites. The policy costs money, covers nothing, and exists solely to produce the required paperwork. Whether that represents a rational allocation of resources or an inefficiency in GC compliance processes is debatable — but the practical reality for Florida sole-owner contractors is that a ghost policy is often the price of admission to commercial subcontract work.

How Ghost Policies Work in Florida — and What They Cost

A ghost policy is written on the same policy form as any other workers' comp policy. The insured is the sole proprietorship or LLC, the owner files (or has already filed) a construction exemption, and the policy covers the business entity with the owner excluded from coverage. The carrier writes it at a minimum premium, because there is no payroll to calculate a rate against — there are no covered employees.

In Florida, ghost policy minimum premiums typically run between $1,000 and $2,000 per year, though this varies by carrier and has trended upward in recent years as carriers have become more cautious about writing them. Some carriers refuse to write ghost policies entirely. Those that do write them generally require the owner's exemption to be current and on file with DFS before issuing the policy. The certificate of insurance produced shows the carrier, policy number, and effective dates — which satisfies most GC compliance requirements.

It is worth being clear about what you are buying: you are paying $1,000–$2,000 annually for a certificate of insurance. If you, as the sole owner, are injured on the job, this policy pays you nothing. If you hire anyone — even one day laborer — they are not covered unless you add them to the policy. The ghost policy covers the entity, excludes the owner, and has no employees. The moment you employ someone, even temporarily, the ghost policy is no longer sufficient and you need actual workers' comp coverage for that worker.

Florida DFS Enforcement and the 2023+ Crackdown on Certificate Fraud

Florida's Division of Workers' Compensation under DFS has intensified enforcement actions around fraudulent certificates of insurance in the construction industry. Ghost policies themselves are not inherently fraudulent — a legitimate ghost policy from a licensed carrier, covering a legitimately exempt sole owner, is a legal instrument. The fraud problem arises when certificates are fabricated, when policy numbers on certificates do not correspond to real policies, or when certificates show effective dates for policies that have lapsed or never existed.

DFS investigators routinely cross-reference certificates presented on construction sites against the actual policy database. Contractors presenting forged certificates face criminal charges under Florida Statute 440.38 and 440.105, which prohibit fraudulent certificates and misrepresentation in workers' comp. Penalties include stop-work orders, fines up to $5,000 per day per employee, and criminal prosecution.

Starting with enforcement initiatives that intensified around 2022–2023, DFS has focused specifically on certificate mills — businesses that produce fraudulent certificates for contractors who want to appear compliant without paying for actual coverage. The use of these services is a serious criminal risk. A legitimate ghost policy from a licensed carrier is not in this category, but contractors should ensure their certificate is backed by a real, current policy before presenting it on any job site.

Ghost Policy vs. PEO Coverage — When Each Makes Sense

The ghost policy is the right tool when you are genuinely a sole owner with no employees, you have a current construction exemption on file, and you need a certificate of insurance for commercial subcontract work. If that describes your business — you work alone, you are the only worker, and you simply need to satisfy GC paperwork requirements — a ghost policy is likely the most cost-effective option. Paying $1,000–$2,000 per year for a certificate is less expensive than carrying full PEO coverage when there is no one to insure.

The calculation changes the moment you add employees, even one. A ghost policy does not cover employees. If you hire a helper, a second worker, or subcontract labor through any mechanism where those individuals are considered your employees under Florida law, you need real workers' comp coverage. Operating with employees and only a ghost policy exposes you to DFS stop-work orders, statutory employer liability for uninsured workers, and personal liability for injuries.

PEO coverage through a program like ours makes more sense when you have employees, when your work volume is significant enough that sole-owner status is genuinely a legal gray area, or when you anticipate growth. PEO coverage is also pay-as-you-go — there is no large upfront deposit, premium tracks your actual payroll, and you get real coverage rather than a certificate placeholder. For contractors at the boundary between "working alone" and "sometimes using helpers," PEO coverage provides genuine protection and satisfies the same GC certificate requirements a ghost policy does.

Frequently Asked Questions — Ghost Policy Florida

Related Resources

• Construction vs. non-construction workers' comp requirements in Florida
• How to verify a workers' comp certificate in Florida
• PEO vs. standard workers' comp policy — full comparison
• Pay-as-you-go workers' comp for Florida contractors
• Get an instant workers' comp quote