Ghost Policy vs. Standard Workers' Comp
for California Contractors (2026)

Sole proprietors and LLCs with no employees often qualify for a ghost policy — saving thousands per year. Here's exactly who qualifies, what SB 216 changed, and how to choose.

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Which One Do You Need?

👻 Ghost Policy — if you are:

A sole proprietor with no W-2 employees
A single-member LLC with no employees
NOT in a SB 216 Phase 1 trade (C-8, C-20, C-22, C-39, D-49)
Looking to minimize WC cost

Typical cost: $800–Varies

📋 Standard WC — if you:

Have any W-2 employees (even 1 part-time)
Hold a C-8, C-20, C-22, C-39, or D-49 license (SB 216)
Want owner injury coverage
Use subcontractors without their own WC

Typical cost: $3,500–$25,000+/year

⚠️ SB 216 Alert — Effective January 1, 2025

C-8, C-20, C-22, C-39, and D-49 license holders must carry active workers' comp regardless of employee count. Ghost policies may not satisfy this requirement for these trades. SB 1455 extended Phase 2 to January 1, 2028.

Full Comparison

Feature	Ghost Policy	Standard WC
Satisfies CSLB WC requirement	✅ Yes	✅ Yes
Covers owner's medical bills if injured	❌ No	✅ Yes
Covers owner's lost wages if injured	❌ No	✅ Yes
Covers employee injuries	❌ No	✅ Yes
Owner is excluded from coverage	✅ Yes	❌ No
Available to sole proprietors	✅ Yes	✅ Yes
Available to LLCs with no employees	✅ Yes	✅ Yes
Required if you have employees	❌ No	✅ Yes
SB 216 compliant (all trades)	Verify by trade	✅ Yes
Annual cost (typical)	$800–Varies	$3,500–$25,000+/yr

Frequently Asked Questions

What is a ghost policy for California contractors?

A ghost policy (also called an owner-exclusion workers' comp policy) is a workers' compensation policy where the owner is excluded from coverage. It satisfies the CSLB's workers' comp requirement for sole proprietors and single-member LLCs with no employees, at a much lower cost than a standard WC policy.

Who qualifies for a ghost policy in California?

Sole proprietors and single-member LLCs with no W-2 employees qualify for a ghost policy in California. If you hire any employees (even part-time), you need a standard WC policy. SB 216 (effective 2025) requires C-8, C-20, C-22, C-39, and D-49 license holders to carry active WC regardless of employee count.

How much does a ghost policy cost in California?

Ghost policies in California typically cost $800–$2,500 per year, compared to $3,500–$25,000+ per year for standard WC (which is based on payroll). The exact cost depends on your trade and license class.

Does SB 216 affect ghost policy eligibility?

Yes. SB 216 (effective January 1, 2025) requires contractors in C-8, C-20, C-22, C-39, and D-49 license classes to carry active workers' compensation regardless of whether they have employees. For these trades, a ghost policy may not satisfy the SB 216 requirement. Contact us to verify your specific situation.

Not Sure Which WC Option You Need?

Our licensed CA brokers will review your license class, employee count, and SB 216 status to recommend the right option.