FAQ’s about DBA Insurance

DBA Insurance is made out to be some sort of complex policy that few agents or brokers are familiar with unless they work with government & defense contractors. To assist in breaking down a few myths, listed are 30 frequently asked questions that may clear the air a bit.

What is Defense Base Act insurance and who must obtain it?

DBA Insurance is considered workers’ compensation insurance for civilian employees working outside the United States on US military bases or under a contract with the U.S. government for public works or for national defense. Must be obtained by Employers, Subcontractors, Subordinate contractors.

Is there a legal way to avoid purchasing Defense Base Act insurance?

Yes. Waivers are permitted and granted for local workers however if no local workers’ compensation laws exist, the waiver has no effect and Defense Base Act insurance must be secured. https://www.dol.gov/owcp/dlhwc/dbawaivers/dbawaivers.htm

What is Public Work?

“Public work” is defined in the Act as any fixed improvement or any project, whether or not fixed, involving construction, alteration, removal or repair for the public use of the United States or its allies. However, “public work” is not limited to construction. It includes any project or operation under service contracts and projects in connection with the national defense or with war activities.

Our contracting officer indicated DBA insurance was not required under our contract. Are we still considered liable if they told us this?

If the Act applies, then Yes. Your company is still required to obtain Defense Base Act insurance. The only party responsible for securing coverage is the contractor. Not responsible for obtaining coverage include the insurance agent or broker; The contracting officer; The contracting agency; The Department of Labor; The State Assigned Risk Pool. Ultimate liability will fall under the contractor.

Should we consider other insurance in addition to Defense Base Act insurance?

Although optional, it is a wise consideration. Additional insurance programs that routinely compliment, although are not required under the Act include, Business Travel Accident, Kidnap & Ransom, and Life Insurance (with war).

What does DBA provide in the form of “Benefits”?

The Defense Base Act provides disability and medical benefits to covered employees injured in the course of or arising from employment and death benefits to eligible survivors of employees killed in the course of employment or who died of causes arising from employment.

DBA Insurance

To whom and when does the Defense Base Act NOT apply?

The Defense Base Act does not apply to the injury or death of (1) an employee subject to the provisions of the Federal Employees’ Compensation Act; (2) an employee engaged in agriculture, domestic service, or any employment that is casual and not in the usual course of the trade, business, or profession of the employer; and (3) a master or member of a crew of any vessel.

Does DBA only apply to US Citizens?

No. It applies to all paid workers associated with the contract. Third-Country Nationals, Local Nationals – Benefits under the DBA are payable regardless of nationality. Therefore, employers should secure insurance coverage for all of their employees working outside the United States under a U.S. government contract, including U.S. citizens and residents, host country nationals (local hires), and third country nationals (hired from another country to perform work in the host country).

We work in Puerto Rico, a US Territory; are we required to have DBA insurance?

Yes, Puerto Rico is covered under the Defense Base Act as part of its scope.

Are grants required to secure Defense Base Act insurance?

Grants – work performed pursuant to a grant or cooperative agreement is not covered under the Act.

Is Defense Base Act Insurance a reimbursable expense under the contract?

The cost of insurance (premiums) from a reimbursement perspective, will be defined in the terms of the contract.

When is Defense Base Act insurance needed?

DBA insurance must be provided to employees working outside the United States on US military bases or under a contract with the U.S. government for public works or national defense.

DBA Insurance

Are subcontractors required to have Defense Base Act insurance?

If they sub the workout, does that subcontractor have to have their own DBA insurance or can they be covered under ours? They have to have their own. DBA Insurance is intended for those workers for a company that is under their payroll and is doing the work themselves. The sub-contractor cannot pass down the work to a sub-sub-contractor and have them covered under their DBA insurance. The insurance requirements under the DBA require every employer (including contractors and subcontractors) either to secure insurance for the payment of workers’ compensation benefits provided under the Act or to be permissibly self-insured. If a subcontractor fails to secure the payment of compensation, the contractor will be liable and will be required to secure the payment of such benefits.

What can be used in lieu of DBA insurance from a program perspective?

(We already have insurance, but not DBA.) Private Insurance Programs may supplement but cannot substitute for mandatory DBA coverage. Supplemental insurance may be considered in addition to DBA, such as life insurance for relatives not covered as dependents under the Act as these benefits are separate from the DBA program.

When is Defense Base Act insurance needed?

In short, whenever an overseas contract is awarded, DBA insurance must be considered. DBA insurance must be provided to civilian employees working outside the United States on US military bases or under a contract with the U.S. government for public works or for national defense.

Interested in learning more?  Contact Brian Smith for more answers to your Defense Base Act questions.  brian.smith@ioausa.com or 404-918-4775