What is DBA Insurance?

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What is DBA insurance?

Well, I can tell you this, it’s different, but it’s not hard. In fact, it’s quite simple. DBA insurance is a different type of insurance coverage that many brokers and agents may not be aware of, but here’s what it is. It’s worker’s compensation for workers that are engaged in US government contracts, outside the continental United States. In other words, any overseas operations. And it doesn’t have to just be on a military installation. It can be any operation that’s being paid for by the US government. And it protects us nationals, third country nationals, and even locals. So if you’ve got local people working on the contract, it protects them as well.

Now, the protections that it afford has to do with the injuries that may be sustained or a payment of benefits to dependents in the event someone is killed during the operation.

DBA is required by primes, subcontractors, and any subordinate contractors that may be engaged on the contract.

DBA Insurance is certainly not a new. In fact, the Defense Base Act was made a law by Congress in 1941. It is administered by the US Department of Labor under the Longshore Harbor Workers’ Compensation Act. For more information and all kinds of questions, you can actually look into this from the US Department of Labor website at dol.gov.

I get asked this quite a bit, is it a reimbursable cost or expense? Well, that depends on what your contract actually stipulates. Some contracts say it is reimbursable, other contracts does not allow it to be reimbursable, but it depends on the wording.

Coverage for DBA insurance is on an annual basis. So even if you have a short-term period in which you’re going to be engaged in the contract, you still have to have the insurance, but it’s done on an annual or 365-day period.

Premiums are determined by the underwriter once they review the application. The reason I bring that up is because even though the US Department of Labor is involved in DBA, they have nothing to do with the rates.

Not all insurance companies write Defense Base Act insurance. In fact, many of them don’t. So finding the right broker that understands this, they know what markets to go to, can save you time, money and resources.

DBA Insurance is not considered 24-hour coverage. And I’ve heard that before where they’re like, “Well, we’ve got DBA. We don’t need any other type of insurance in order to support that effort. That’s not contractually required.” That’s true, but DBA is not 24-hour coverage. In fact, there are situations where if they go on leave, or they take a brief moment away from the area of where they’re operating, that DBA may not cover them. So you need to be aware of that.

Waivers may be applied for Defense Base Act insurance. And applied for through the Department of Labor. This article, however, will not get into that content because it’s just too lengthy of a discussion.

Now, if you’re a USAID contractor, then your DBA policy is going to be administered through that agency. It’s not going to be done with the open market like we’re talking about right here.

How difficult is it to get DBA insurance? Well, it’s not difficult at all. In fact, it’s a simple application process, but there are keys to the application that need to be considered in order for you to get the best rates and then have the quotes turned around in the most expeditious timeline possible.

It is critical that the following items be considered when completing your DBA insurance application. We need to know the

    • contract or solicitation number
    • legal name of your company
    • Number of employees, that being the third country nationals, the US nationals and the locals
    • Associated payroll for each of those categories
      Country or Countries of operation, and finally…
    • What the operations actually consists of.

With DBA underwriting, it’s not necessarily hard for them to process it, to get the quote out, but they must know what you’re doing. The more vague someone is with their operational descriptions, the more latitude the underwriters are going to have with not really understanding what you’re doing and it could jeopardize obtaining a lower rate. I highly recommend that you are very clear when it comes to your operational description.

Now to conclude. Defense Base Act insurance is different but it’s easy to obtain when you have the right team working with you or your team in order to expedite that process.

If you’re interested in learning more and you would like a professional that handles Defense Base Act insurance exclusively, you can contact me direct at 404-918-4775 or brian.smith@ioausa.com. My name is Brian Smith and I’m with the Insurance Office of America.