Notice that the DBA does not specify the nationality of its covered employees; hence, local citizens and nationals of third countries are both automatically covered. If a waiver from the U.S. Department of Labor is not in place, then insurance coverage under the Defense Base Act is obligatory. There are conditions that must be met before a waiver will be approved.
- Class of employee must have available alternate means of compensation such as Employers Liability, Workers’ Compensation, or Social Security.
- Waivers cannot be requested for the class of employees including U.S. citizens or those employees hired inside the U.S.
- Agency letting the contract must recommend that such a waiver be granted.
- The contractor must file an application with the U.S. Department of Labor
Contracting with the government always includes a clause mandating that the winning bidder carry appropriate Defense Base Act coverage. If you run into trouble because you didn’t get DBA insurance, you could lose your contract or face fines.
DBA insurance is required by law and there are severe consequences for not having it. Insurance is required as part of the bidding process for all government contracts. If you don’t, you’ll have to pay penalties and risk losing the contract. Employers without DBA coverage face the additional and most severe penalty of being sued under common law with no protection from common law defenses. To rephrase, the burden of proof is entirely on the defendant and is not on the claimants or their heirs. Finally, claims against the insured may be filed in Federal Court. Ashcraft & Gerel, LLP, the preeminent U.S. law firm representing injured workers under the Defense Base Act, warns that such cases can rack up enormous legal fees and should give overseas contractors cause for serious concern.
The failure to secure DBA insurance results in severe repercussions. There is a provision in every government contract that compels prospective contractors to acquire the proper insurance. Should you fail to comply, you will be subject to financial penalties as well as the potential loss of the contract. Employers that do not have DBA coverage are liable to be sued under common law, and their common law defenses will not be available in these cases, which is an additional and more severe punishment. To put it another way, all that is required of the claimants or their heirs is to initiate a lawsuit; they do not need to provide evidence of carelessness. Last but not least, any and all claims may be filed before a Federal Court, and they are presented directly against the insured. For more information on DBA Insurance contact us at Risk Reconnaissance.