What is DBA Insurance?
The Defense Base Act (DBA) offers contractor personnel working under government contracts outside of the United States protections similar to workers’ compensation. It is designed to be a complement to domestic workers’ compensation coverage and serves as the only recourse for employees who die or are injured on the job while performing government prime contracts or subcontracts while working abroad. In situations where an injury to or death of a DBA-covered worker results from a war risk hazard, the government essentially self-insures under a companion statute known as the War Hazard Compensation Act (WHCA). The Department of Labor oversees and manages both the DBA and WHCA programs.
Nearly 200,000 prime and subcontractor personnel are covered by DBA Insurance, which generates more than $400 million in annual premiums for the whole government. The DBA coverage market is now controlled by three big carriers, with one of them accounting for nearly three-quarters of the market, despite the DOL has given approval to a sizable number of insurers to offer DBA coverage.
The Price and Benefits of DBA Insurance: Under government contracts, the price of DBA insurance is reimbursable if it is reasonable and allocable.
DBA coverage
- The Defense Base Act (DBA) offers contractor personnel working under government contracts outside of the United States protections similar to workers’ compensation.
- The Defense Base Act offers disability, medical, and death compensation to qualified employees who are hurt or killed while working, regardless of whether the incident takes place during regular working hours. In other words, DBA requires longer work hours and goes beyond the typical weekday. Under the Defense Base Act, two-thirds of the employee’s typical weekly wages, up to the current level of $1,256.84 per week, are paid as compensation for total disability.
- Up to the present weekly maximum rate, death payments are equal to half of the employee’s average weekly wages for a surviving spouse or kid and two-thirds of those earnings for two or more such survivors. Benefits for permanent total disability and death may be payable for the rest of one’s life and are based on the yearly cost of living adjustments. The Defense Base Act does not provide a minimum wage rate.
The DBA as it is now written contains five clauses that call for coverage:
- Any worker on a base or reserve used by the military outside of the U.S.
- Any employee working abroad on public works projects supported by the US government.
- Any employee working on military or public works projects for a foreign government that has been considered essential to American national security.
- Personnel who work for the U.S. government and receive funding for services rendered beyond the scope of standard military channels or equipment.
- Any employees of any subcontractors who are engaged in a contract similar to numbers 1 through 4 above.
What is the Defense Base Act (DBA)?
The DBA is an expansion of the Longshore and Harbor Workers’ Compensation Act (LHWCA), which offers employees of U.S. government contractors who work abroad disability compensation and medical benefits as well as death benefits to eligible survivors of employees. The DBA incorporates the LHWCA’s provisions, with a few exceptions.
Who is covered under the DBA?
The following employment activities are covered by the DBA:
- work for private employers on American military installations or on any territory outside of the country that the US uses for military reasons, including those in US territories and possessions;
- labor for any U.S. government agency on public work projects (see FAQ 3), including service and construction contracts related to the nation’s defense or to hostilities abroad;
- Contracts that are sponsored and approved by the US under the Foreign Assistance Act, which among other things allows for the sale of military goods and services to its allies for cash if the work is done outside of the US;
- Work for American businesses that offer welfare or other services to the armed forces abroad, such as the United Service Organizations (USO); and
- Any accident or fatality involving one of these employees that happens while they are being transported to or from their place of employment, whether the employer or the US is paying for the transportation or its expense.
- All employees engaged in such employment, regardless of nationality, including U.S. citizens, residents, host country nationals, local hires, and third-country nationals (people hired from another country to work in the host country), are covered by the Act if any one of the aforementioned conditions is met.
- The Federal Employees’ Compensation Act’s provisions, employment in agriculture, domestic work, or any other employment that is casual and outside the normal course of the employer’s trade, business, or profession, and employment as a master or crew member of any vessel are exempt from the DBA’s application to injury or death.
Types of DBA Coverage Offered
If employees working for the government are killed or hurt while on the job, the following are covered under Defense Base Act insurance:
Medical:
Any government contractor who has an occupational injury is entitled to treatment from a doctor of their choosing or as necessary to treat the injury.
Burial Benefits
Whether you were fatally hurt or seriously injured while doing your employment duties, you are entitled to compensation for your lost salary.
Disability Benefits:
The employee is entitled to 2/3 of their typical weekly wages in the event of a total disability. Disability benefits may occasionally be given for the rest of one’s life. Up to a current maximum of $1,726.98 each week, employees are eligible to receive up to 2/3 of their weekly wages. Additionally, compensation is offered for partial earnings loss.
Death Benefits:
These allow the surviving spouse and/or children to receive a portion of the deceased employee’s earnings. Beneficiaries who are covered under the DBA’s permanent complete disability and death benefits coverage may occasionally receive payments for life. The cost of living adjustments that are made annually may also apply to these payments. An employee’s surviving spouse or one child will receive half of their weekly wages. If there are two or more surviving family members, some may be qualified for two-thirds of a deceased spouse’s earnings.
No Benefit:
Contractors who pass away while working are not eligible for death benefits unless they have qualifying dependents like a spouse or children.
Additional Coverage to Consider
Offsite coverage that is thorough is essential. DBA insurance only protects you while you’re working, but these plans can offer you additional security as you carry out your government contract:
Basic Liability: protects employees who might cause property or physical harm. Injured parties are also reimbursed for their medical costs. It also covers cases that claim a contractor’s services caused property damage or injuries.
Travel Accident Insurance: Offers your employees around-the-clock protection while they are away from home, even if they are on vacation. Everything from emergency medical evacuations to disability insurance may be covered.
Covers employees in the case of a kidnapping or ransom demand. Additionally, it can pay for the price of extortion, ransom, and unlawful detention.
Life Provides benefits to a deceased employee’s spouse or other chosen beneficiary. Depending on the contract, many things can qualify. Contact a Clements advisor to learn more.
Health: Pays for inpatient, outpatient, and emergency costs for accidents that happen outside of the workplace.
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