Introduction To DBA Coverage
The coverage provided under the DBA is similar to traditional workers’ compensation insurance, but also includes benefits for disability and death caused by war or acts of terrorism.
DBA insurance is not widely known or understood in the insurance market because it only applies to a specific subset of employers and employees.
Many government contractors may be unaware of the DBA and their obligation to provide DBA insurance to their employees because it is not typically included in standard commercial insurance policies.
It’s important for government contractors to familiarize themselves with the DBA and ensure they are in compliance with the law to avoid potential legal and financial consequences.
Ways to provide DBA insurance:
- Purchase from specialized insurance provider: There are a number of insurance companies that offer DBA insurance policies to government contractors. These policies typically include coverage for workers' compensation, disability, and death caused by war or acts of terrorism.
- Self-insure: Some larger contractors may choose to self-insure for DBA coverage. This means that the contractor sets aside funds to pay for any DBA-related claims that may arise.
- Government-sponsored organization: Some government-sponsored organizations, such as the Overseas Private Investment Corporation (OPIC), offer DBA insurance coverage to contractors working on their projects.
- Government-sponsored program: The U.S. Department of Labor (DOL) operates a program that provides DBA insurance coverage to government contractors. Contractors can obtain coverage through this program by paying an assessment fee to the DOL.
Conclusion
In conclusion, the Defense Base Act (DBA) is a federal law that requires certain employers, including government contractors, to provide workers’ compensation insurance to their employees working on overseas government contracts. DBA insurance is not widely known or understood in the insurance market because it only applies to a specific subset of employers and employees. Many government contractors may be unaware of the DBA and their obligation to provide DBA insurance to their employees because it is not typically included in standard commercial insurance policies.
It is important for government contractors to familiarize themselves with the DBA and ensure they are in compliance with the law to avoid potential legal and financial consequences. In addition to consulting with insurance experts or legal counsel, contractors can also refer to resources such as the U.S. Department of Labor’s website (https://www.dol.gov/agencies/owcp/dlhwc/dba) for more information on DBA requirements and compliance.
According to the U.S. Department of Labor, in 2020 there were over 1,200 Defense Base Act claims filed, with over $150 million in benefits paid out to workers. This highlights the importance of compliance with the DBA and obtaining adequate insurance coverage for employees working on overseas government contracts. It is essential for government contractors to stay informed and stay compliant with the DBA to protect both themselves and their employees from potential financial losses.
