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Ghost Policy in South Carolina

workers’ compensation policyIn the state of South Carolina, any business that assigns work without obtaining from the subcontractor a certificate of workers’ compensation coverage may be responsible for any injuries sustained by the subcontractor’s employees.

A subcontract is an agreement between two individuals or companies in which one individual or company does work as part of a larger project. It is called a “sub” contract because it falls under the original contract of the overhead project.

Generally, a workers’ compensation policy would provide a worker with workers’ compensation benefits, including medical and lost-wage benefits, if the worker should become injured on the job.

However, in this scenario, a subcontractor may choose to buy what is commonly called a ghost policy, and exclude himself as a covered risk.

The term ghost policy was given to these policies due to the fact that they don’t actually cover anyone. Understandably, this may sound very strange and confusing to many workers in South Carolina.

Ghost Policies Can Lead to Many Problems for South Carolina Workers

Ghost policies essentially provide insurance for no one. These policies are simply certificates that are given by the sub-contractor to the person that he or she is working for in order to protect the general contractor from liabilities associated with injuries sustained by the subcontractor or his or her workers.

The problems associated with ghost policies are extensive. Tragically, workers that are severely injured on the job may not realize that the individual who hired them has a ghost policy. When these workers are badly injured, the minimal to non-existent coverage does not pay for their medical bills or cover any portion of the income they may lose while trying to recover.

Ghost policies are simply a ticket for a contractor to work without having to pay for actual workers’ compensation insurance. These policies can go for as little as $900 a year as opposed to the roughly $30,000 annual premium that is generally needed to cover a crew of workers, according to a South Carolina Workers’ Compensation Advisory Committee report from 2009.

These bare-bones policies are bad for workers and business owners alike. They are a manipulation of the law and essentially a way for them to pretend coverage exists so that work can be done.

Insurance companies are the only ones who stand to gain from these dangerous policies – and even insurance companies are sometimes left in the dark about the actual logistics of the businesses for which they provide policies.

However, ghost policies are seen as a way of skirting the law and tempting devastating consequences. Sadly, they are currently unregulated in the state of South Carolina.

Has You or a Loved One Been Injured on the Job in South Carolina?

If you or a loved one has been injured on the job and struggling with issues created by a ghost policy, you still have legal options available to you. In some cases, such as those involving construction accidents, you may be able to take your employer to court and fight for the compensation you deserve or seek a claim against the property owner.

You should speak with an experienced workers’ compensation attorney from Land Parker Welch LLC to learn more about your options. Our law firm has more than 120 years of combined legal experience, including a deep background in South Carolina workers’ compensation law. We are passionate about protecting the rights of workers in Manning and throughout the state.

Contact us today by phone or through our convenient online form. We can provide a free and confidential consultation about your case.

Sources / More Information:
Workers’ Compensation Advisory Committee Report, South Carolina Department of Insurance