Technically, no one is covered, but Ghost Policies still serve a purpose.  In most states, if an employer has a workers compensation policy, all workers (1099 subcontractors or W2 employees) are automatically covered on the policy unless they have their own policy. To avoid having to cover and pay for all of those workers, the employer may require the worker to carry their own policy. If that worker doesn’t have any workers of their own (i.e. people that they pay directly – employees, helpers, subcontractors), they would get a workers compensation policy that shows they have zero payroll and zero employees. Then they would exclude themselves to lower the cost, which now makes it a Ghost Policy.