If you are a United States government contractor working abroad, then you know that there are certain risks that come with the job–both to your business and your employees. You may be wondering if you need DBA insurance, and what the application process looks like. In this post, we will walk you through everything you need to know about the DBA insurance application process–including the top 5 factors that influence the success of your application and how to price your policy. Plus, we will highlight the top 5 business factors that can affect your DBA insurance coverage so you know what to expect when you find your preferred carrier.
The DBA Insurance Application Process: What Contractors Need to Know
What Are the 5 Primary Factors Influencing DBA Insurance Application Coverage?
When you’re planning a government-contracted mission abroad, you understand there are a lot of uncertainties around leaving your home country and working overseas. Perhaps the key benefit of acquiring DBA insurance (aside from it typically being a legal requirement) is the peace of mind it provides in the event that an unexpected accident occurs. However, as each government project entails a unique set of risks, circumstances, and scope of work, it’s important that contractors work together with their insurance carriers to create a high-coverage plan based on accurate risk assessment.
The top five questions an insurer will ask when determining the best policy for a contractor are as follows:
1. Where will the work take place? In which country or geographic location?
2. Who will be working for you? What are their qualifications, competencies, and experience levels?
3. What type of work will you be completing? Manual labor, administrative work, etc
4. When will the work take place? During what season, voting period, or time of year?
5. How will your employees move from place to place? What are your transportation plans?
While it can at first seem hard to quantify the risk of any given assignment, by having a conversation with your carrier about these five topics, you will likely be able to find the best policy to protect your team and your mission. The more details you can provide your insurer, the more accurate they can be with their policy coverage!
How Does DBA Insurance Pricing Work?
DBA insurance is not too different from workers’ compensation in a lot of ways; in essence, it is basically an extended workers’ compensation policy to protect American workers on contract overseas. Similarly, pricing for DBA insurance is typically calculated in a similar manner to domestic workers’ compensation.
For example, you must have an estimated payroll amount for 12 months. Even if this number is just a rough guess, it gives the broker a sense of where to start with pricing your policy. Additionally, a carrier will need to know about the scope of your business and how many employees you have—including the number of folks who will be working abroad.
You will also need to distinguish between United States citizens working on your contract and local nationals who will be collaborating with your efforts. If your policy is audited, do not panic! This is normal. In fact, the process is somewhat similar to a federal tax return in that at the end of your contract’s term, your carrier will request basic payroll information to make any necessary adjustments.
As with any business endeavor, you will have to file taxes during the appropriate time of year—so it’s best practice to have a strong and accurate grasp of payroll and financial dealings. The government contract that hired you will take some federal income tax out of your paycheck, and then any money you may owe is based on your projected income.
What 5 Factors About Your Business Model Can Affect DBA Coverage?
A DBA insurance carrier won’t just stop at the logistics of your contract, your team, and your mission—they will also likely take a deep dive into how you manage your company as well. A thorough DBA insurance broker will come up with a profile of your business to adjust and take notes accordingly. These are the top five things insurance carriers want to know about your management style:
1. How long have you been doing what you do? How old is your business?
2. Are there any prior insurance losses on your record?
3. Do you keep personnel records, including vital documents like passports, visas, etc?
4. How and where do you keep personnel records? Are they secure?
5. Do you perform background checks on your employees before hiring them?
Simplified DBA Insurance Application Process with Risk Reconnaissance
Especially if this is your first time contracting with a government agency, seeking high-value, low-rate DBA insurance coverage can seem daunting and the DBA insurance application process can seem mysterious. However, with a few simple exchanges with an experienced carrier and underwriter about the details of your operation—from your business practices and personnel to the task at hand—you will likely end up with the right policy for your upcoming endeavors.
Want to know how easy the DBA insurance application process can be? Click here to get started with a basic estimate, or contact Risk Reconnaissance today to speak with some of the most experienced DBA coverage underwriters in the industry!