A interesting topic from Facebook about a certain type of policy called ghost policy - REO Property Preservation Forum
 
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post #1 of 8 (permalink) Old 12-15-2015, 02:11 PM Thread Starter
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A interesting topic from Facebook about a certain type of policy called ghost policy

Is there really a policy called that? I thought the conversation was every interesting to say the least. So what is it? Why would anyone want one?

"So say we all!"
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post #2 of 8 (permalink) Old 12-15-2015, 07:23 PM
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It's more of a nickname, but yes, companies that need a workers comp policy can get a "ghost policy" or a cert of insurance for workers comp that really doesn't exist. They certify that they have no employees by saying that they are all subcontractors, so they save tons of money on coverage. Problem is, they don't have coverage. So if someone gets hurt on your property, and the contractor doesn't have WC insurance, the injured's family will be able to go after the homeowner's policy. It's a shell game to get a certificate of insurance that doesn't cover WC.

This page actually explains it pretty well:

http://leaflimb.com/dangerous-truth-...ance-policies/
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post #3 of 8 (permalink) Old 12-15-2015, 07:45 PM
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All States allow Owner-Operators to purchase a WC policy and exclude the owner. This is done to protect the hiring party (homeowner or a National). I agree with most of the Tree Cutters Ins reasoning---not all. Good article find Joe. I'm gonna print and file.
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post #4 of 8 (permalink) Old 12-16-2015, 07:53 AM
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All States allow Owner-Operators to purchase a WC policy and exclude the owner. This is done to protect the hiring party (homeowner or a National). I agree with most of the Tree Cutters Ins reasoning---not all. Good article find Joe. I'm gonna print and file.

Workmans Comp insurance is designed to protect employees in the event of an injury on the job. Why would anyone purchase this insurance as an owner operator and exclude yourself. I'm assuming by owner operator, the company has no employees. So you are basically wasting money purchasing a policy to protect no one.
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post #5 of 8 (permalink) Old 12-16-2015, 08:53 AM
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Workmans Comp insurance is designed to protect employees in the event of an injury on the job. Why would anyone purchase this insurance as an owner operator and exclude yourself. I'm assuming by owner operator, the company has no employees. So you are basically wasting money purchasing a policy to protect no one.
I believe that some of the nationals require WC, whether the vendor uses subs or not. I may not be correct, but that is the idea I was getting from some of the responses on the FB post.
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post #6 of 8 (permalink) Old 12-16-2015, 09:14 AM
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Yup, five brothers does...that's why I quit them...I am in NY and work alone as a LLC...makes no sense what so ever.
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post #7 of 8 (permalink) Old 12-16-2015, 09:38 AM
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I believe that some of the nationals require WC, whether the vendor uses subs or not. I may not be correct....
Yes, that is true.

There are guys on here that understand insurance way more than I do, but here's my opinion.

I carry the ghost policy because it is required even though I don't hire anybody-employee or subs. I can't purchase a policy that will cover me in my state. I do however, cover myself under a separate disability policy. It's possible I could get a WC policy for myself through a state policy, but if I open that door the state won't stay out of business, and let's be honest, the gov don't care a squirt of P about my time and productivity.

I won't bash any national for requiring the WC policy. I believe it is their insurers that are requiring them to require us to carry it.

My policy is relatively cheap ($35 a month or something like that) and I say it's just a cost of doing business. Don't sweat the small stuff.
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post #8 of 8 (permalink) Old 12-16-2015, 06:34 PM
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Originally Posted by madxtreme01 View Post
Workmans Comp insurance is designed to protect employees in the event of an injury on the job. Why would anyone purchase this insurance as an owner operator and exclude yourself. I'm assuming by owner operator, the company has no employees. So you are basically wasting money purchasing a policy to protect no one.

Here in MI, if you are, say, a single member LLC, you don't need workers comp because it is just you. You can get the waiver from the State. But, some company for example might want a WC cert, and will not accept a state waiver. So, you could get the ghost policy, certifying that you have no employees, or that everyone is a sub. The issue would be if that single member LLC got some people to do some work and incorrectly classified them as "subcontractors" then got hurt. They would not be covered with a ghost, and everyone is then screwed.

If you use temp agencies, many of them provide workers comp for the people you get from them, avoiding that issue entirely.
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