Ghost Workers Comp Policy Requirements by State: 2026 Guide

If there's one thing we've learned after placing ghost workers comp policies across all 50 states, it's this: what works in Texas doesn't necessarily work in California, and what's available in Georgia may be completely off the table in Ohio. Workers compensation is fundamentally a state-regulated system, and ghost policies—while legal and accepted nationwide—look very different depending on which state you're operating in.

This guide walks through the state-level landscape for ghost workers comp policies in 2026: the states with strict requirements where ghost policies are most commonly needed, the monopolistic states where the private insurance market doesn't apply, and the practical guidance you need before buying.

Why State Rules Matter So Much

Workers compensation is governed at the state level. Each state sets its own:

• Coverage mandate — who must carry workers comp and who can exempt themselves
• Minimum premium rates — the floor cost of any WC policy, including ghost policies
• Classification system — what job categories exist and what rates apply to each
• Officer and owner exemptions — whether and how business owners can exclude themselves from mandatory coverage
• Enforcement mechanisms — how aggressively the state pursues uninsured employers

A ghost policy that satisfies a Florida general contractor's certificate requirement may not satisfy a New York building owner's requirements. And in four states, private ghost policies aren't available at all.

The Four Monopolistic States: Special Rules Apply

Four states—North Dakota, Ohio, Washington, and Wyoming—operate state-run exclusive workers compensation funds. Private insurance carriers are not allowed to write workers comp coverage in these states. That means traditional ghost policies from private carriers are unavailable.

What this means for you:

If you do business exclusively in one of these states, you must purchase coverage from the state fund. In most cases, sole proprietors and partners can exempt themselves from mandatory coverage in these states, but the exemption process and certificate options differ from private-market ghost policies.

North Dakota — The North Dakota Workforce Safety & Insurance (WSI) covers most employers. Sole proprietors are automatically excluded but can elect coverage voluntarily. If you need a certificate to satisfy a GC's requirement, WSI can issue one showing voluntary coverage.

Ohio — The Bureau of Workers' Compensation (BWC) covers Ohio employers. Sole proprietors and partners are excluded by default. If a GC requires a certificate, a sole proprietor can purchase voluntary coverage through the BWC. The Ohio BWC also offers a "minimum premium" policy for employers with very low payroll.

Washington — Washington's Department of Labor & Industries (L&I) administers the state fund. Sole proprietors are exempt from mandatory coverage but may voluntarily elect to cover themselves through L&I if needed to satisfy contractual requirements.

Wyoming — The Wyoming Department of Workforce Services administers workers comp. Similar to the other monopolistic states, sole proprietors can voluntarily elect coverage to obtain a certificate.

Key takeaway: If you operate in a monopolistic state, you'll be working with the state fund directly, not a private carrier. The certificate availability and process is different—often slower—but coverage is available for those who need it.

Florida: One of the Most Enforcement-Active States

Florida has earned a well-deserved reputation as one of the most aggressive states when it comes to workers comp enforcement, particularly in the construction industry.

Florida's construction mandate: All construction industry employers must carry workers comp, with very limited exceptions. Florida defines "construction" broadly—it includes not just residential and commercial building but also landscaping, cleaning services on construction sites, and several related trades.

Officer exemptions: Corporate officers can exempt themselves from WC coverage in Florida, but the exemption requires a formal filing with the Florida Division of Workers' Compensation. There is a limit on the number of officers who can be exempt per company (up to three). The exemption form must be filed before the officer can be excluded from coverage.

Ghost policy landscape: Florida ghost policies from private carriers are available and widely used by sole proprietors and small contractors. The Florida minimum premium for a ghost policy typically runs $800–$1,500 per year depending on the trade classification. Given Florida's enforcement activity—random worksite inspections, stop-work orders, and significant penalties for uninsured employers—having a valid ghost policy COI is essential for any contractor bidding commercial work.

What contractors must watch: Florida's exemption rules for officers and the construction-industry mandate mean that even "administrative" businesses in the construction supply chain may need WC coverage or a valid exemption. When in doubt, call a specialist.

California: Strict Requirements, High Minimums

California is one of the largest workers comp markets in the country and one of the most regulated. Ghost policies are available but come with California-specific nuances.

Coverage mandate: California requires workers comp for all employers with employees. Sole proprietors with no employees are not required to carry coverage but cannot be excluded from a WC policy if they elect to purchase one.

Officer exemptions: Licensed contractors in California can waive WC coverage for themselves only if they are a sole owner of a corporation and no other employees exist. The rules are strict and the state's Contractors State License Board (CSLB) monitors compliance closely.

Ghost policy landscape: California ghost policies are available from the private market and through the State Compensation Insurance Fund (SCIF), California's competitive state fund. Minimum premiums in California tend to be among the highest in the nation—expect $1,200–$2,500 annually for a ghost policy depending on trade classification.

AB5 and misclassification: California's AB5 law makes it very difficult to classify workers as independent contractors in most trades. If you work with subcontractors in California, the COI requirement from those subs is more critical than ever because the reclassification risk is high. Make sure every sub has their own WC coverage and can prove it.

Texas: A Unique Case

Texas is the only state in the country that does not require most private employers to carry workers comp. This makes Texas unusual for ghost policy discussions.

The non-subscriber system: Texas employers can "opt out" of the state WC system and become non-subscribers. Non-subscribers are not required to carry WC insurance but face significant common law liability if an employee is injured—they cannot use the exclusive remedy defense.

Ghost policies in Texas: Despite the lack of a mandatory requirement, ghost policies are still widely purchased in Texas. Why? Because many Texas-based GCs, commercial clients, and federal contracts still require subcontractors to show a WC certificate, even though Texas law doesn't mandate it. A Texas ghost policy costs roughly $600–$1,000 annually and satisfies most contractual certificate requirements.

Employer's liability: In Texas, employers who purchase WC coverage also get employer's liability coverage (Part B). Non-subscribers have no such protection. For Texas contractors who bid federal or commercial projects, a ghost policy provides the COI and employer's liability coverage they need.

New York: High Costs, Strong Enforcement

New York's workers comp system is known for high costs and active enforcement. The New York Workers' Compensation Board actively investigates uninsured employers, and penalties are substantial.

Coverage mandate: All employers with employees must carry workers comp in New York. Sole proprietors with no employees are generally exempt, but if they work in the construction industry and hire anyone—even temporarily—coverage kicks in immediately.

Ghost policy landscape: New York ghost policies are available through the private market and through the New York State Insurance Fund (NYSIF). Minimum premiums in New York are among the highest nationally—$1,500–$3,000 annually is common for construction classifications.

Construction industry rules: New York's Construction Industry Fair Play Act creates a strong presumption that construction workers are employees. For a GC working in New York, this makes collecting valid COIs from subcontractors absolutely essential. A sub without a valid WC policy creates direct liability exposure for the GC.

Southeast States: Florida, Georgia, Tennessee, North Carolina, South Carolina

The Southeast is a strong ghost policy market, driven by active construction industries and GCs who require COIs from all subcontractors.

Georgia: Ghost policies are readily available in Georgia. Minimum premiums are moderate ($600–$1,000). Georgia sole proprietors in construction are frequently required to show WC certificates by commercial GCs even though state law doesn't mandate coverage for those with no employees.

Tennessee, North Carolina, South Carolina: Similar market dynamics. Active construction markets, GCs that require COIs, and readily available ghost policies at moderate minimum premiums. North Carolina is notable for having a relatively straightforward ghost policy application process.

Midwest States: Variable Landscape

Illinois: High minimum premiums and active enforcement, similar to the coastal states. Ghost policies are available but tend toward the higher end of the cost spectrum ($1,000–$2,000). Illinois has strict requirements for construction industry employers.

Michigan, Indiana, Ohio (non-monopolistic note): Wait—Ohio is monopolistic, but Michigan and Indiana are private market states. Both have ghost policies available at moderate cost. Michigan's workers comp system is managed through the state's competitive market, with the Michigan Assigned Risk Plan available for hard-to-place accounts.

Minnesota, Wisconsin: Active private markets. Ghost policies available at competitive rates. Wisconsin's workers comp system is one of the more employer-friendly in the Midwest.

Southwest and Mountain West: Growth Markets

Arizona: Arizona's ghost policy market is active and cost-effective. The state has no monopolistic fund. Minimum premiums run $500–$800 annually, making Arizona one of the more affordable states for ghost policies. Sole proprietors doing construction work regularly purchase ghost policies to bid commercial projects.

Colorado, Nevada, Idaho, Utah: All private market states with active ghost policy availability. Cost ranges from $500–$900 annually. These states have seen significant construction growth, driving demand for ghost policies among small contractors.

New Mexico: Active market, moderate costs. Similar to Arizona in requirements and availability.

Northeast States: High Cost, Strict Requirements

New Jersey, Connecticut, Massachusetts: These states have high minimum premiums and active enforcement. Ghost policies are available but expect to pay $1,500–$2,500 annually. The Northeast generally has the highest minimum premium thresholds in the country.

Pennsylvania: Active private market. Ghost policies available. Pennsylvania's workers comp system is competitive and ghost policies are routinely available at $800–$1,400 annually for most construction classifications.

What to Look For When Buying a Ghost Policy by State

Regardless of which state you're in, here are the key questions to ask before purchasing:

1. Is the carrier licensed in my state? Always verify that the insurance carrier is licensed to write workers comp in your state. Ask for the NAIC number and check it on your state's insurance department website.

2. Does the policy include employer's liability (Part B)? Most ghost policies include employer's liability as standard, but verify the limits. The minimum is $100K/$500K/$100K. Some projects or states require higher limits.

3. What is the minimum premium? Ghost policy premiums vary by state. Get this number upfront so you can budget accurately.

4. Does the policy satisfy my contractual requirements? Review the insurance requirements in the contract you're bidding. Make sure the ghost policy you're purchasing matches what's required—state, coverage type, limits, and any additional insured requirements.

5. How are subcontractors handled at audit? Even on a ghost policy, if you hire subcontractors during the year without their own WC coverage, you may face additional premium at audit. Understand the policy terms before you hire.

Getting the Right Ghost Policy for Your State

Ghost policy requirements are complex and state-specific. What works in one state may not work in another, and the consequences of getting it wrong—being uninsured for a worksite injury, failing an audit, or losing a contract over a rejected COI—are serious.

Contractors Choice Agency places ghost workers comp policies in all 50 states. Our specialists know the rules for your state and can get you a valid certificate quickly, usually within 24–48 hours. Don't guess at the requirements.

Call 844-967-5247 or get a quote online and tell us which state (or states) you operate in. We'll walk you through exactly what you need.