What Are “Ghost” Insurance Policies?

Without proof of workers’ compensation insurance, construction crews usually will not get hired.

Unfortunately, some in the construction industry illegally circumvent these laws in order to save money. For example, in North Carolina, construction employers with 3 or more employees are required to have workers’ comp insurance for those employees. One man was always asked to show proof that his employees were insured before general contractors would agree to hire him. But instead of maintaining actual workers’ comp insurance for his employees, he would tell his insurance agent that as the sole proprietor of his business, he would forego insurance on himself, which is his right. But he also told the agent that his business did not have any employees and that the 5 man crew he put together was comprised of independent contractors. Then he bought a “ghost” insurance policy for an employee who at some point may work at his business during the year.

By doing this he saved a large sum of money. Instead of paying an annual premium of $30,000, the man paid $850.

However, an individual who worked for the man’s construction company for many years was seriously injured in 2009. He was in a company vehicle driven by another employee, who fell asleep at the wheel. The employee’s spinal cord was badly damaged and he is not unable to feel his body from the chest down. Lifetime care costs for this man are predicted to reach $8 million.

The case has been in litigation for years because the employer did not have workers’ compensation insurance.

Unfortunately this practice is fairly common in the construction industry and it ends up really hurting already injured workers, who are entitled to medical care and workers’ compensation benefits. Construction is a dangerous business, and though construction workers are trained, there are still many dangers that they face on a daily basis. They deserve to at least be protected by workers’ compensation insurance.

Missouri Workers’ Compensation

In Missouri, construction businesses with only one or more employees are required to have worker’s compensation insurance. The workers’ comp laws are designed and implemented by each state, so they do differ significantly from state to state. Most states, however, require that businesses have insurance for their employees because workers’ comp insurance protects both workers and their employers and it keeps workers’ comp cases out of the civil courts.

If you or a loved one has been injured in a Missouri construction accident and are having trouble getting the compensation to which you are entitled, contact a Missouri workers’ compensation attorney who can advocate for you.

Law Office of James M. Hoffmann

Injury can make people feel very vulnerable and when there are mountains of paperwork and legal hoops to jump through, the whole situation can seem hopeless. But you are not on your own when it comes to obtaining the benefits that your job has entitled you to. Our team of legal experts at the Law Office of James M. Hoffmann understand the every-changing Missouri workers’ compensation laws. When you hire our firm, you can be confident everything will be done to protect your rights and get you the compensation you are entitled to.

To schedule a free consultation, call our St. Louis Workers’ Compensation Lawyers at (314) 361-4300 or fill out our Online Case Evaluation Form.