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Ghost Policies – Five Minutes Of Work Will Let You Know


Five Minutes Of Work Can Spot Ghost Policies

Ghost policies for Workers Comp coverage have been in existence for quite some time. I have seen so many of them over the years in the construction industry. There is a very easy way to check to see if the policy is a ghost policy.

Businessman Checking Time Ghost Policies On His Watch

The certificate of insurance may not be that clear. If a business owner obtains a policy then excludes himself/herself, this does not mean the policy is a ghost policy.

Regardless, there is a very easy way to make sure:

  • The policy has not been cancelled mid-term
  • The number of workers covered
  • Policy is not a ghost
  • Proper states covered

When I asked this at a presentation, the #1 response was to call the agent. However, there is a more direct and up-to-the-minute method. The name of the carrier should be prevalent on the certificate.

A very brief online search will give you the WC carrier’s phone number. I have sometimes seen them listed on the certificates. Call the customer service number for the carrier. Using the policy number on the cert, you should be able to verify coverage, etc.

Vector graphic of Five Minutes in Clock
(c) 123rf.com

I have seen employers being slammed at premium audit time if the certificates dates do not cover the complete time the subcontractor worked for the employer. Avoiding the Ladder of Insurance(c) claims is another good reason to call the carrier directly.

Why not call the agent? The broker/agent will usually have current information to a point. The up-to-date info would come directly from the carrier. Some carriers may want the certificate of insurance faxed or emailed to them for verification.  

This may cause the verification of the cert to take longer than five minutes, but it is better than paying for a huge claim or paying the premium for the subcontractor at audit time.  

If your company is not monitoring the expiration of the certificates of insurance or not even asking for them, then be ready to have your carrier pay for an accident.

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James J Moore - Workers Comp Expert

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Management Consultants, Inc. in 1996. J&L’s mission is to reduce our clients’ Workers Compensation premiums by using time-tested techniques. J&L’s claims, premium, reserve and Experience Mod reviews have saved employers over $9.8 million in earned premiums over the last three years. J&L has saved numerous companies from bankruptcy proceedings as a result of insurance overpayments.

James has over 27 years of experience in insurance claims, audit, and underwriting, specializing in Workers’ Compensation. He has supervised, and managed the administration of Workers’ Compensation claims, and underwriting in over 45 states. His professional experience includes being the Director of Risk Management for the North Carolina School Boards Association. He created a very successful Workers’ Compensation Injury Rehabilitation Unit for school personnel.

James’s educational background, which centered on computer technology, culminated in earning a Masters of Business Administration (MBA); an Associate in Claims designation (AIC); and an Associate in Risk Management designation (ARM). He is a Chartered Financial Consultant (ChFC) and a licensed financial advisor. The NC Department of Insurance has certified him as an insurance instructor. He also possesses a Bachelors’ Degree in Actuarial Science.

LexisNexis has twice recognized his blog as one of the Top 25 Blogs on Workers’ Compensation. J&L has been listed in AM Best’s Preferred Providers Directory for Insurance Experts – Workers Compensation for over eight years. He recently won the prestigious Baucom Shine Lifetime Achievement Award for his volunteer contributions to the area of risk management and safety. James was recently named as an instructor for the prestigious Insurance Academy.

James is on the Board of Directors and Treasurer of the North Carolina Mid-State Safety Council. He has published two manuals on Workers’ Compensation and three different claims processing manuals. He has also written and has been quoted in numerous articles on reducing Workers’ Compensation costs for public and private employers. James publishes a weekly newsletter with 7,000 readers.

He currently possess press credentials and am invited to various national Workers Compensation conferences as a reporter.

James’s articles or interviews on Workers’ Compensation have appeared in the following publications or websites:

  • Risk and Insurance Management Society (RIMS)
  • Entrepreneur Magazine
  • Bloomberg Business News
  • WorkCompCentral.com
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
  • Workers Compensation.com
  • LinkedIn, Twitter, Facebook and other social media sites
  • Various trade publications


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