Kitchen exhaust cleaning carries real employee-injury exposure. Crews climb ladders, access rooftops in the dark, work around slippery surfaces, handle strong degreasers and caustic chemicals, operate pressure-washing equipment, and perform service near electrical and mechanical systems. A slip on a wet kitchen floor and a fall from a roof hatch sit on the same job ticket.
Workers’ compensation insurance provides benefits when an employee suffers a covered work-related injury or illness. Those benefits typically include medical treatment, partial replacement of lost wages, disability benefits, rehabilitation, and, in severe cases, death benefits.
State Law Sets the Legal Floor
Workers’ compensation requirements are governed primarily by state law, so no single nationwide rule applies to every hood cleaning company. The variation is wide:
- Some states require coverage as soon as a business has one employee
- Others apply different employee thresholds before coverage becomes mandatory
- Several apply stricter rules to construction-related or contracting classifications
- Business structure, ownership percentage, and officer exclusions change the answer
Worker classification and the use of subcontractors also affect whether coverage is legally required. A hood cleaning company operating across state lines may face different obligations in each territory it serves.
Customer Requirements Often Exceed State Law
Restaurant groups, general contractors, property managers, and vendor-compliance platforms set their own insurance requirements, and those requirements frequently run stricter than any state statute.
A solo operator might be legally exempt from carrying workers’ compensation and still be required to provide proof of coverage before being approved as a vendor. The customer’s concern is straightforward: an injured worker or subcontractor could seek benefits from another party when the cleaning company carries no policy of its own.
The distinction is worth holding onto. State law determines whether a policy is legally required. The service contract determines what insurance must be in place to perform the work and get paid.
The Owner-Only Challenge and Ghost Policies
Owner-only businesses with no employees face a specific problem: no legal requirement to carry coverage, paired with a customer who will not release a purchase order without a certificate.
In some states and through certain carriers, a business may be able to purchase what is commonly called a ghost policy. The policy is issued with no anticipated employee payroll, and the owner is excluded from coverage. It produces evidence that a workers’ compensation policy exists, which satisfies many vendor-compliance requirements.
One point deserves emphasis: a ghost policy does not necessarily mean the owner is personally covered for workplace injuries. The policy exists to demonstrate compliance, and an owner who wants personal injury protection generally needs to be endorsed onto the policy where the state and carrier allow it, or to arrange separate accident and health coverage.
What a Ghost Policy Costs
No dependable nationwide price exists. Cost depends on:
- The state and its rating bureau
- The carrier and its appetite for the class
- The classification code assigned to exhaust cleaning work
- Minimum premium requirements
- Policy fees and state assessments
These policies are commonly written on a minimum-premium basis and may be payable in full at binding. A ghost policy can be a legitimate compliance tool for a qualifying owner-only business. Once employees or subcontractor exposures enter the picture, the policy must reflect the business as it actually operates.
Employees, Subcontractors, and Premium
Workers’ compensation functions differently depending on whether a hood cleaning company runs W-2 employees or independent subcontractors.
W-2 employees are generally included in the company’s workers’ compensation policy. Premium is calculated largely from their payroll and the classification assigned to the work performed.
Legitimate independent subcontractors should carry their own workers’ compensation policy and provide a Certificate of Insurance showing that coverage in force.
The problem surfaces when a subcontractor is uninsured, or when a worker treated as a subcontractor is ultimately classified as an employee under applicable state law. In either case, the hiring contractor may be responsible for additional workers’ compensation premium at audit, and potentially for other liability connected to the injury.
Contractors that use subcontractors benefit from keeping current Certificates of Insurance on file for every subcontractor, covering the full period during which that subcontractor performs work. Certificates expire mid-project more often than most owners expect, and an expired certificate carries very little weight at audit.
A Practical Checklist
For a hood cleaning company reviewing its workers’ compensation position:
- Confirm the requirement in every state where work is performed
- Read the insurance requirements in customer contracts and vendor-compliance portals, since those usually govern
- Verify whether owners and officers are included or excluded on the current policy
- Confirm the classification code matches the actual work being performed
- Collect Certificates of Insurance from every subcontractor before work begins
- Track certificate expiration dates and request updated copies at renewal
- Keep signed subcontractor agreements filed alongside the certificates
Frequently Asked Questions
Does a one-person hood cleaning business need workers’ compensation?
State law may not require it, though restaurant groups and general contractors frequently do. Many owner-only operators carry a policy to satisfy customer contracts rather than a statute.
Is the owner covered under a ghost policy?
Generally no. The policy is issued with the owner excluded and no anticipated payroll. Owners seeking personal coverage typically need an inclusion endorsement where permitted, or separate accident coverage.
What happens if a subcontractor has no workers’ compensation coverage?
Their labor costs may be added to the hiring contractor’s premium at audit, and the hiring contractor may face additional exposure if that worker is injured and later classified as an employee.
Why does the classification code matter so much?
Premium is calculated from payroll multiplied by a rate tied to the classification. A code that does not match the actual work can produce a premium that is wrong in either direction, and corrections tend to arrive at audit.