Defense Base Act Insurance: GovCon Compliance Guide 2025

Defense Base Insurance Explained

Making it easier to understand Defense Base Act Insurance for GovCon Professionals

By Brian Smith | Insurance Office of America

Congratulations! You’ve just landed an OCONUS (Outside Continental United States) government contract. As you scan through the insurance requirements, you stumble upon something unfamiliar: Defense Base Act Insurance (DBA).

If you’re asking yourself, “What the heck is this?”…You’re not alone. I am breaking it down in simple terms and exploring. DBA insurance is critical for your compliance and your team’s protection.

What is Defense Base Act Insurance

What Is DBA Insurance?
DBA insurance is workers’ compensation for employees working overseas under U.S. government contracts. It provides:

  • Higher benefit levels than domestic workers’ comp
  • Coverage for U.S. nationals, third-country nationals, and local nationals
  • Protection for injuries, illnesses, or death occurring in the scope of work abroad
Worker protected by Defense Base Act Insurance while OCONUS
OCONUS worker covered by Defense Base Act Insurance
History of the Defense Base Act

A Quick History Lesson
The Defense Base Act was passed in 1941 during World War II to protect civilian workers supporting military operations overseas. It extends the Federal Workers’ Compensation Program and is administered by the U.S. Department of Labor, to cover overseas contract work.

Who needs it and who is covered?

Who Needs DBA Insurance?
If your contract involves:

  • Work on U.S. defense bases abroad
  • Operations under a U.S. government contract overseas

Then DBA insurance is mandatory. This includes:

  • U.S. nationals
  • Third-country nationals (foreign workers not from the host country)
  • Local nationals (workers from the host country)
Regulatory Requirements

Contracting officers must ensure compliance under:

FAR 48 CFR 28.309
FAR 52.228-3 and 52.228-4
Prime contractors are ultimately responsible. If a subcontractor lacks coverage, the prime is liable. Subcontractors must carry their own DBA insurance, don’t rely on the prime to cover you.

Can You Opt Out?
No. DBA insurance is required by federal law. Non-compliance can result in:

  • Fines
  • Jail time
  • Personal liability for executives
Exceptions to Defense Base Act Insurance

Self-insurance (must be approved by the Department of Labor) https://www.dol.gov/agencies/owcp/dlhwc/dba

Country-specific waiver (only valid if local laws offer equivalent coverage)
Important: U.S. nationals must be covered under DBA, even if a waiver exists.

How to Get DBA Insurance
Obtaining Defense Base Act Insurance is easy. The application is typically 3 pages and includes:

  • Contract type
  • Scope of work
  • Payroll details
  • Countries of operation

Pro Tip: Include your contract number, it’s essential for claims processing.

Premiums & Cost Planning

DBA premiums are calculated using:

Payroll ÷ 100 × Rate

Premiums are paid upfront, and can impact cash flow. Therefore, it’s important to consider premium financing if needed.

In addition, if your contract is fixed-price, you should include the Defense Base Act Insurance cost in your proposal. However, for cost-plus contracts, you may be reimbursed if premiums exceed expectations.

Proposal Strategy
Your proposal team should understand:

  • DBA rates
  • Foreign casualty insurance
  • Projected insurance expenses
  • Work with your insurance broker to ensure accurate cost projections.

Furthermore, work closely with your insurance broker to ensure accurate cost projections. As a result, proposals present a stronger, more competitive structure.

Pro Tip: If you manage multiple DBA policies, consolidate them. It improves efficiency, and compliance tracking.

Your 8 Employer Responsibilities

Once coverage is in place, here’s what you need to do:

  1. Obtain DBA insurance before deployment
  2. Post LS-241 notice for employees
  3. Educate employees on benefits and injury reporting
  4. File injury reports within 10 days
  5. Notify your insurer
  6. Authorize medical care
  7. Provide employment and medical records
  8. Assist employees or survivors with claims

In short, these steps protect both your employees and your business. Moreover, consistent compliance reduces the risk of costly disputes.

The Zone of Special Danger

This legal doctrine extends Defense Base Act Insurance to non-work-related injuries in hazardous environments. In other words, even activities outside of direct job duties may still be covered.

For instance, if employees are confined to a compound and injured during recreational activities, DBA may still apply.

Example: A worker twists an ankle playing basketball on base. Although it’s not a work activity, coverage may be granted under the Zone of Special Danger.

Final Thoughts

DBA insurance isn’t just a requirement, it’s a safeguard for your team and your business. If you have questions, reach out to your insurance professional or contact me directly.

For a deeper dive into the broader landscape of insurance challenges faced by government contractors, read my companion article, Navigating the Complex World of Commercial Insurance for Government Contractors. It explores how to approach risk management holistically, understand carrier expectations, and build a more resilient insurance strategy across your GovCon portfolio.

Until next time, stay safe and stay compliant.

Brian Smith, Insurance Office of America

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