A workers’ comp ghost policy is the bare-minimum-premium policy a truly solo Florida contractor buys for one reason: to hand the general contractor the certificate of insurance they won’t let you on site without. It works only when the business genuinely has no employees and uses no uninsured labor — because in Florida construction, workers’ comp is required at the very first employee, not the fourth.
Workers' Comp · Florida · Regulated by FL OIR · Workers' Comp in Florida
A workers’ comp ghost policy is a minimum-premium, zero-payroll policy issued to a business with no employees — usually a sole proprietor or single-officer company — so it can produce the certificate of insurance a general contractor demands, often with a waiver of subrogation that a bare Florida exemption can’t carry. It covers essentially nobody, the owner is usually excluded, and because Florida construction requires workers’ comp at one or more employees, the moment a contractor hires even one worker or uses an uninsured subcontractor, they need a full payroll-rated policy instead.
Florida is harder on construction than any other state, full stop. Most non-construction employers here don’t need workers’ compensation until they hit four or more employees. A construction employer needs it at one — the lowest threshold in the country. The rule lives in Florida Statutes Chapter 440, inside the “employment” definition at §440.02. (The subsection numbers in §440.02 have been shuffled over the years, so always check it against the current statute rather than memorizing a number.)
What counts as the “construction industry” is broad: for-profit work involving building, clearing, filling, excavation, or any substantial improvement to a structure or to land, with the exact trade classifications set by Division rule. A homeowner improving their own property — not for resale within a year — is generally left out.
Here’s the part that catches owners off guard. Corporate officers and LLC members who own at least 10% count as “employees” for workers’ comp purposes unless they file an exemption (§§440.02, 440.05). So a one-person construction corporation isn’t below the line — it’s already sitting on the one-employee trigger, owing coverage until the owner-officer formally exempts out. That single quirk is the whole reason ghost policies and officer exemptions exist in Florida construction.
A workers’ comp ghost policy (an industry nickname, not a term you’ll find in the statute) is a minimum-premium policy issued to a business with no employees — usually a sole proprietor, or a corporation or LLC whose only owner-officers have already exempted themselves. A few traits define it:
None of this makes it shady. A ghost policy is a real, in-force policy from an admitted carrier — the honest, intended tool for a genuinely solo operator who has to show proof of a policy but employs no one. Its legitimacy rests entirely on one fact staying true: no employees, no uninsured subs.
GCs chase down workers’ comp proof from every subcontractor for one hard legal reason: under the statutory employer doctrine (§440.10), a GC inherits liability for the workers of any uninsured sub (more on that below). To cap that exposure, GC contracts often ask for more than a bare exemption — they want a Waiver of Subrogation and frequently an Additional Insured endorsement too.
And here’s the catch: those endorsements can only attach to an actual policy. A state-issued Certificate of Election to be Exempt isn’t a policy, so it can’t carry a waiver of subrogation. A solo contractor who has properly exempted out but whose GC contract still demands that waiver gets boxed in — they buy a minimum-premium ghost policy purely to satisfy the paperwork. That’s the single most common reason a one-person Florida contractor ends up needing a ghost policy on top of, or instead of, an exemption.
This is the part to sit with before you lean on one. Zero payroll plus an excluded owner means a ghost policy provides no coverage for any actual worker. The moment a contractor:
…there is now a worker on the job with no workers’ compensation coverage at all — precisely the gap Florida’s one-employee construction rule was written to close. The ghost policy doesn’t respond, and the contractor is out of compliance. Put plainly: the day you put a real worker on a job, the ghost policy stops being the right tool and you need a full, payroll-rated policy.
Using a ghost policy to hide real payroll isn’t a clever loophole — it’s premium fraud, and Florida prosecutes it. Under §440.105, it’s unlawful to knowingly present a false or misleading statement as evidence of compliance, or to conceal payroll or misrepresent what employees do to dodge or shrink premium. The charge scales with the dollar amount involved (§440.105(4)(f)):
The criminal side isn’t the only edge. The Division of Workers’ Compensation also enforces civilly through Stop-Work Orders (§440.107). Failing to secure required coverage is treated as an immediate danger, which lets an investigator issue an on-the-spot order that shuts down every operation. The penalty runs to 2× the premium that should have been paid over the prior two years, or $1,000, whichever is greater — plus $1,000 a day for every day you keep working in violation of the order. Florida funds proactive, unannounced job-site sweeps, so a misused ghost policy is unusually likely to surface, whether at an inspection or the renewal audit.
Read this as a warning, not a recipe. The takeaway is the opposite of evasion: keep the policy honest, and the moment you have real workers, get them real coverage.
For an owner-only business, the exemption is the other path — and often the companion — to a ghost policy. It’s the Notice of Election to be Exempt, filed with the Division. In construction, the rules are tight:
An exemption costs nothing beyond the $50 every two years and carries no policy; a ghost policy is a real purchased policy. Plenty of GCs will take an exemption certificate as proof — but, as covered above, a GC that requires a waiver of subrogation or additional insured won’t, and that’s exactly what nudges a solo contractor toward buying a ghost policy.
Under §440.10, a contractor that sublets work has to secure workers’ comp for the employees of any subcontractor who hasn’t secured it themselves — “except to employees of a subcontractor who has secured such payment.” The statute goes a step further and puts an affirmative duty on the GC: “A contractor shall require a subcontractor to provide evidence of workers’ compensation insurance.”
So picture a sub who hands over a ghost-policy COI while actually running uninsured workers on the job. The GC becomes the statutory employer and inherits the claim, the liability, and the bill. That’s exactly why GCs and their COI-tracking vendors collect and re-verify certificates and exemptions so aggressively — and why a sub’s ghost policy that’s masking real payroll quietly becomes everyone’s problem up the chain.
A COI or an exemption doesn’t prove itself. GCs and brokers check it straight against the Division’s Proof of Coverage database and the exemption registry, searchable by employer name, FEIN, policy number, or the exemption holder’s SSN. The lookup returns policy status, expiration, reported payroll, and governing class code — which is precisely how a zero-payroll ghost policy gives itself away, and how a GC confirms a sub’s coverage hasn’t been cancelled mid-term or let an exemption lapse.
A ghost policy is the right tool when all of these hold:
You need a full, payroll-rated policy the moment any one of these happens:
The honest summary: a ghost policy clears a paperwork requirement for a one-person business — it’s not a stand-in for real coverage, and using one to disguise payroll is premium fraud and a felony in Florida. Acolite is a licensed brokerage, not an insurer. We place Florida workers’ comp for contractors — both full payroll-rated policies and minimum-premium options — with admitted carriers, subject to underwriting, and we can help file officer exemptions correctly and tell you whether an exemption alone will satisfy your GC. This page is informational only and isn’t legal advice; verify exemption rules with the Florida Division of Workers’ Compensation.
These are the gaps that competitors gloss over and that cause denied claims or rejected certificates.
The owner-officer has usually already filed an exemption, so the ghost policy leaves them out by design. Get hurt on the job and neither the policy nor the exemption pays a dime of workers’ comp benefits — adding owner injury coverage is a separate election, subject to underwriting.
Florida’s construction threshold is a single employee. Your first W-2 hire, 1099 worker, or cash day laborer wipes out the zero-payroll assumption, and that worker is uninsured under a ghost policy. You need a full, payroll-rated policy that same day.
Hire a subcontractor who can’t show their own workers’ comp or a valid exemption and §440.10 makes you their statutory employer. Their injured worker’s claim flows straight up to you — and a ghost policy won’t respond to it.
A construction officer exemption lasts just two years (§440.05(6)) before it has to be renewed. GCs re-check the expiration every cycle against the Proof of Coverage database, so a lapsed exemption can lock you out of the site or hand the GC statutory-employer exposure.
Every renewal, the carrier audits a ghost policy to confirm zero payroll and no uninsured labor. Find payroll and the carrier reprices it retroactively as an audit premium, the “ghost” status evaporates, and the undisclosed payroll can open the door to premium-fraud findings.
If your GC contract calls for a waiver of subrogation or an additional insured endorsement, a bare exemption certificate won’t cut it — those endorsements only attach to an actual policy. Read the GC’s insurance schedule before you assume an exemption is enough.
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| Factor | Impact | Detail |
|---|---|---|
| Minimum premium vs. full payroll policy | Major | A ghost policy reports zero payroll and is priced at the carrier or state minimum — in Florida typically about $1,000–$2,500 per year, subject to class code and underwriting. A full policy is rated on actual wages and costs materially more. |
| Governing class code | Major | The construction trade class code sets the manual rate. Higher-hazard trades (roofing, framing, exterior work) carry far higher rates than lower-hazard interior or clerical work, affecting both the minimum and any full-policy premium. |
| Renewal audit outcome | Major | If a renewal audit finds payroll the carrier was not told about, it reprices the policy retroactively and bills an additional audit premium — erasing the “ghost” savings and potentially raising fraud concerns. |
| Officer exemptions on file | Moderate | Valid exemptions (up to three officers, 10% ownership, $50 / two years) remove those owners’ payroll from the rating base, which is what allows a single-officer company to reach a near-zero (ghost) premium in the first place. |
| Owner injury coverage added back | Moderate | Electing to cover an otherwise-excluded owner adds a rated payroll figure and raises premium above the bare minimum — a trade-off between cost and the owner actually having coverage if hurt. |
| Stop-Work Order penalty exposure | Major | Misusing a ghost policy to mask payroll risks a Stop-Work Order plus a penalty of 2× the premium that should have been paid over the prior two years (minimum $1,000), $1,000/day for operating in violation, and felony fraud charges — dwarfing any premium “saved.” |
It’s a minimum-premium workers’ comp policy issued to a business with no employees. It reports zero payroll and usually excludes the owner, and its whole job is to produce the certificate of insurance a general contractor requires — often with a waiver of subrogation that a bare state exemption can’t carry.
Yes. Florida construction requires workers’ comp at one or more employees — the strictest threshold in the country, while non-construction employers generally aren’t required until four. And because owner-officers count as employees unless they file an exemption, a one-person construction company sits on that trigger by default. (Fla. Stat. §440.02)
Yes — as long as it’s used honestly by a business that truly has no employees and no uninsured labor. It’s a real, in-force policy from an admitted carrier. Use one to hide payroll or to paper over workers it doesn’t actually insure and it becomes premium fraud, a felony in Florida (§440.105).
Typically somewhere around $1,000–$2,500 a year, depending on the governing class code and carrier, and some run lower. The carrier sets the price and it’s subject to underwriting — Acolite is a broker, so we can’t promise a number.
An exemption (the Notice of Election to be Exempt) is a state filing — $50, good for two years — that lets a qualifying owner-officer opt out of being a covered employee. It isn’t a policy. A ghost policy is an actual purchased, minimum-premium policy. You typically need the ghost policy when a GC requires a waiver of subrogation or additional insured, which a bare exemption can’t provide.
It’s a Notice of Election to be Exempt (§440.05) for a corporate officer or LLC member who owns at least 10% of an active Florida corporation or LLC. The fee is $50, the certificate runs two years, and no more than three officers per company or affiliated group can exempt. The catch: an exempt officer can’t recover Chapter 440 benefits if they’re injured.
Those workers are uninsured and you’re operating in violation of Florida’s one-employee construction rule. That can mean a Stop-Work Order, a penalty of 2× the premium you should have paid over the prior two years (minimum $1,000), $1,000 a day for working in violation of the order, and felony premium-fraud charges (§§440.107, 440.105).
Yes. Under §440.10 a contractor must require evidence of workers’ comp from every subcontractor — because if a sub turns out to be uninsured, the GC becomes the statutory employer and inherits the claim and the cost for that sub’s injured workers.
They check it against the Florida Division of Workers’ Compensation Proof of Coverage database and exemption registry, searchable by name, FEIN, policy number, or SSN. The lookup shows policy status, expiration, reported payroll, and class code — so a zero-payroll ghost policy shows up as exactly that.
Two years from the issue date, then it has to be renewed (§440.05(6)). GCs re-verify the expiration every cycle, so letting one lapse can keep you off the site.
No. An exempt officer can’t recover benefits or compensation under Chapter 440 (§440.05(13)), and a ghost policy generally excludes the owner too. If you want real injury coverage for yourself, you need a policy that actually covers the owner — subject to underwriting.
Acolite is a licensed brokerage, not an insurer. We can place a minimum-premium (ghost) policy or a full payroll-rated policy with an admitted carrier, subject to underwriting, help file officer exemptions correctly, and tell you whether an exemption alone will satisfy your GC.
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