Can You Get Workers’ Comp Without Payroll? Exploring the Option of a Certificate-Only Policy

In the realm of construction, the question often arises: Can you secure a worker’s compensation policy without having any payroll? The short answer is yes, and this blog post will delve into the reasons behind this and why it’s a prudent choice for contractors, whether they operate on a larger scale or as smaller entities.

Understanding the Need: No Payroll, No Problem

As a general contractor or a contractor on paper, you may find yourself in situations where requests for workers’ comp coverage arise, even if you don’t have any employees on payroll. This scenario is not uncommon, and the good news is that there is a solution. Some refer to it as a “ghost policy,” while others simply term it a “certificate-only policy.” Regardless of the nomenclature, it serves a crucial purpose.

Why Opt for a Certificate-Only Policy?

The primary reason for obtaining a certificate-only policy, despite having no payroll, lies in the requests you may receive from clients or vendors. They might insist on you having workers’ comp coverage, even if you don’t have direct employees. This becomes a protective measure, especially concerning subcontractors. If, for any reason, a subcontractor’s workers’ comp policy becomes invalid during an injury incident, having your own policy acts as a safety net.

The Safety Net Effect: Protecting Contractors

When obtaining a certificate-only policy, it’s often facilitated through the state fund, particularly in California, where State Fund is a common provider. This policy serves as a protective measure against potential legal complications. In the event of an injury or workers’ comp claim involving subcontractors or other workers not directly employed by you, having this policy in place can shield you from claims suggesting that your job site was unsafe.

The Two-fold Purpose: Vendors and Self-Protection

In summary, there are two key reasons to consider a certificate-only policy: meeting vendor requirements and protecting your business. Vendors may request it without concern for your lack of payroll, and it acts as an additional layer of defense against potential legal actions related to employee injuries. It’s a strategic move to ensure that, even without direct employees, you have measures in place to safeguard your business.

Conclusion: Safeguarding Your Construction Business

In the dynamic world of construction, it’s essential to be proactive in addressing potential risks. Obtaining a certificate-only policy, despite the absence of payroll, is a smart and strategic step. It not only meets external requests but also provides an invaluable layer of protection in the unpredictable landscape of construction-related liabilities. Consider reaching out to state funds, such as State Fund in California, to explore the option of securing a zero-payroll policy for your construction business.

Thank you for reading! If you have any questions or would like further clarification on this topic, please don’t hesitate to contact me. Feel free to explore my other videos for additional insights.

YouTube video

Please complete the form below for a quote.

Request Your Proposal Here

Are you ready to save time, aggravation, and money? The team at Contractors Risk Solutions is here and ready to make the process as painless as possible. We look forward to meeting you!

Call Email Claims COI Request