Defense Base Act Workers’ Compensation

If you have ever wondered how Defense Base Act Insurance differs from Workers’ Compensation, you found the right post.  In this post, I will detail the differences between DBA Insurance and Workers’ Compensation.

Workers engaged in dangerous construction

First off, let’s look at the similarities between Defense Base Act Insurance and Workers’ Compensation:

  • Both are insurance programs with the intent of providing replacement of lost wages, medical expenses, and possibly life expectancy values should a worker meet an early demise.
  • DBA Insurance and Workers’ Compensation Insurance provide a wide range of benefits, however both are centered on returning an injured worker to their full level of compensation before the injury occurred.
  • The insurance applies to injuries sustained while working and not intended to provide coverage while away from work.
  • Reporting of each injury is similar in a first report of injury as well as an accident investigation.

What difference is there between DBA Insurance and Workers’ Compensation?

There are a variety of difference between DBA Insurance and Workers’ Compensation Insurance, to include but not be limited to:

  • United States vs. Foreign Countries
    • Defense Base Act Insurance covers workers while working overseas, outside the United States.
    • Workers’ Compensation Insurance does not extend outside the United States and is relegated to injuries and lost wages only while working in the U.S.
  • Program Administration
    • Defense Base Act Insurance is administered by the US Department of Labor under the Longshore Harbor Workers’ Compensation Act.  All claims resulting in loss of life are reviewed for eligibility by the DOL.
    • Each state has it’s own rules governing workers compensation.  As a result, it is administered by the insurance commission for each state, not the US Department of Labor.
  • Required by Law
    • DBA Insurance is required by law to be in place for any US Government contract with workers outside the United States.  Although waivers for the insurance may be approved by the US Department of Labor, the insurance is still required for all US Nationals.
    • Workers’ Compensation is not required by law to be purchased by the employer.  However, if not provided to workers, the employer may be sued for damages as a result of work related injury to the workers.  The cost of which could be hundreds of thousands of dollars.
  • The Benefits
    • Under DBA Insurance, employee benefits are higher than most state plans.  The common denominator in both is the rate of pay earned by the worker as a starting point for benefit amounts.
    • Claims can be denied by insurance carriers under both types of insurance plans.

Defense Base Act Insurance is, by all comparisons, Workers’ Compensation

Although there are differing levels of benefits between DBA Insurance and Workers’ Compensation, the principle is the same…Make the injured worker whole and without a loss of wage.

Each employee should be aware of the insurance programs and how to report a claim.  By being open and honest, workers will engage the programs as needed.  With a thorough accident investigation program coupled with a strong safety culture, injuries will remain low.

For additional information, contact the author, Brian Smith at brian.smith@ioausa.com or via phone at 770-250-0227.

Brian Smith is a Vice President and Partner with the Insurance Office of America and has a comprehensive website for additional insurance information at www.riskreconnaissance.com