Defense Base Act (DBA) insurance is a type of insurance coverage for U.S. government contractors that offers protection to both employees and subcontractors against job-related injuries while they are working outside of the country.
Who Needs DBA Insurance?
If a business has secured a contract with the Department of State, U.S. Army Corps of Engineers or Department of Defense, it is required by law to obtain DBA insurance coverage for all of its employees when they work overseas.
Some of the specific activities that contractors and subcontractors must be engaged in to warrant DBA insurance coverage include working on public contracts with U.S. government agencies, working for private employers on American military bases or other land used for military purposes by the U.S. outside of the country, working on contracts outside the U.S. that were approved and funded by the Foreign Assistance Act, and working for American employers in offering support services such as welfare outside the U.S. to benefit America’s military.
The requirements were introduced in the Defense Base Act in 1941, and it has evolved over the years to support a growing need to address employee injuries overseas. The increasing costs of medical care, emergency surgeries and medical evacuation in other countries, particularly those that lack proper infrastructure, has caused the premiums for this type of insurance to rise in recent years.
DBA Insurance Policy Costs
A DBA insurance policy must be obtained for the relevant employees before their employment contract commences. The employer – whether it is a contractor, subcontractor or government agency – must pay all of the premiums for the policy and ensure their employee receives all of the compensation or benefits should an applicable situation arise. They must also maintain the policy throughout the duration of the employee’s contract.
One of the biggest factors in determining the cost of DBA insurance is the geographical area(s) where the work will be performed. This can be used to assess the expected level of danger as well as the type of infrastructure available and average cost of medical care.
Another factor that insurance companies will consider is the total payroll for the overseas employees, the number of employees who will be traveling overseas and their qualifications. If the number of trips planned is already known, they will weigh this information as well. They will also consider any previous claims or losses with a DBA insurance policy and the employees’ transportation plans when they are in the country in question. The insurer will also want to know if employees are working on a military base.
All reasonably priced and qualifying DBA policies are considered reimbursable costs under government contracts. Therefore, it is important to work with a company that offers policies that are in keeping with government requirements and priced fairly.
What Coverage Does DBA Insurance Provide?
The coverage provided by DBA insurance is similar to that of a standard domestic workers compensation policy in the sense that it covers injuries, disability and death. The main difference is the fact that DBA insurance offers protection for employees while they are performing their assigned duties abroad.
It is important to understand that DBA insurance does not cover employees while they are on American soil. Its coverage only applies internationally; standard workers compensation is needed to cover injuries sustained while working in the U.S.
Unlike a domestic workers compensation policy, a DBA insurance policy’s protection may extend beyond the hours when employees are on the job. In some cases, it may even cover the entirety of the employee’s day. When employees are being sent to areas with a high degree of civil unrest or a war zone, they may need protection for all of the time they spend there.
DBA coverage must be obtained for all personnel who work on a relevant contract, regardless of their citizenship.
DBA Claims Procedures
Claims for injuries and illnesses must be filed properly in order to obtain full benefits. An employer should notify their DBA insurance carrier as soon as possible following the illness, injury or death in question and obtain authorization for any medical attention or treatment that is needed. They must also file an Employer’s First Report of Injury using form LS-202 within 10 days of the injury.
The Consequences of Not Carrying DBA Coverage
Failing to obtain DBA insurance in situations where it is required can lead to fines and the potential loss of the contract. In addition, employers who do not have DBA coverage are subject to lawsuits in which common law defenses are waived. This means that those who file claims, or their heirs, do not have to prove that negligence was involved.
Get Started with the Washington, D.C. Metro Area DBA Insurance Leaders
Business Benefits Group (BBG) is a top provider of DBA insurance coverage in the Washington, D.C. metropolitan area. Contact us today to learn more about this type of coverage and the requirements for contractors working overseas. We offer tailored policies with fast turnaround and represent all major carriers.