DBA Insurance Requirements and Coverage FAQ

Do you have employees who work overseas? Are you and your crew considered independent contractors for the federal government? If you answered yes to either of these questions, then you need DBA insurance. DBA insurance, also known as Defense Base Act insurance, provides coverage for businesses that have employees working away from U.S. soil over the course of a government contract. In this article, we will answer some Frequently Asked Questions about this type of coverage and provide information on DBA insurance requirements!

DBA insurance, or Defense Base Act insurance, is a type of workers’ compensation insurance that covers contractors working with the United States government on overseas assignments. This protects employers and their crew from costs associated with injury, disability, or death while on assignment, and typically provides coverage beyond normal working hours. (For more on all things DBA insurance, check out our recent article on everything a beginner needs to know about DBA insurance!)

If you have questions about DBA insurance requirements, you’re likely wondering about the extent of coverage provided and what you need as a contractor to be able to qualify. The Defense Base Act (DBA) requirements stem from the Longshore and Harbor Workers’ Compensation Act (LHWCA) but with a few modifications. Insurance requirements for DBA coverage are nearly identical to those for the LHWCA in that it is the responsibility of the employer to provide their crew with compensation in the event of a work-related injury, disability, or death. For a more complete look at DBA insurance requirements, please reference the official website of the U.S. Department of Labor.

Whether you’re a new government contractor or a seasoned one, there are some finer details of DBA insurance coverage that responsible employers often end up wondering about. Here are some of the most common Frequently Asked Questions about DBA insurance!

If you are a government contractor with the intention to complete a contract overseas, chances are you will need DBA insurance. Essentially an extension of domestic workers’ compensation insurance, DBA insurance is a legal requirement for contractors working with the federal government—unless they are operating in a waiver country with a local workers’ compensation scheme for national employees, or the Secretary of the Department of Labor has issued you a waiver.

If you don’t have an approved waiver from the Department of Labor, the short answer to this question is “yes,” there will be legal consequences—spanning from hefty fees and penalties to potential jail time and misdemeanor convictions. Whether you are a private contractor or a big corporation, if you fail to provide your workers with DBA insurance for your assignments abroad, someone will be held liable—from an officer in your company to the business owner.

Of course, the sooner you can make a DBA claim after an accident, injury, or death, the better, as this will help smooth out the process of any necessary medical treatment or evacuation efforts. Should an accident occur, a contractor must notify their insurance carrier or claims administrator and file an Employer’s First Report of Injury (Form LS-202) within 10 days of the event with the Office of Workers’ Compensation Programs under the U.S. Department of Labor. This form can be filed electronically or by mail and afterward, the claim can be viewed online by the District Office with legal jurisdiction for your case.

There are many factors that influence how much a contractors’ DBA insurance might cost—from the relative stability or instability of the country in which they are set to work, the type of work involved, the extent of their payroll, and even what U.S. federal agency they will be working with. An insurance writer will weigh these factors and come up with a fair DBA insurance rate, which is the equivalent of the total cost of the payroll.

Typically, Total Payroll Costs x DBA Rate = Annual DBA Cost. If you have any questions about how you can get the best DBA insurance rates for your upcoming contract, contact the professionals at Risk Reconnaissance today!

A so-called allowable cost, or one that can be reimbursed by a grant or contract, is typically only feasible if the cost in question is a “reasonable,” allocable amount. So, does this include DBA insurance?

Fortunately for most contractors, DBA insurance is considered an allowable cost—though the degree of your reimbursement may depend on a number of factors. For example, some contracts only see the lowest possible costing coverage plan as an allowable cost—and any extra coverage will likely not be reimbursed. If you’re curious about your degree of DBA insurance reimbursement, contact retired military veteran and insurance agent Brian S. Smith for the best possible rates and reimbursement strategy!

Also sometimes referred to as the “Zone of Special Danger Doctrine,” this concept applies to the scope and type of insurance coverage available to employees and contractors working abroad in potentially dangerous circumstances. One key tenant in this doctrine is the fact that a worker sent abroad is continually subject to unique perils they would not likely face domestically—which is why DBA insurance often covers the entirety of the scope of the contract, not just normal working hours like traditional workers’ compensation insurance.

If you’ve got an assignment abroad, you’ll need all the tools in your belt to help you get the job done safely, efficiently, effectively, and with consideration for your workers and their families. One of the best things you can do for your crew as a government contractor is to provide them with quality DBA insurance coverage that will not only compensate them in the event of an injury but will compensate their families in the event of their death.

High-quality DBA coverage can be costly, and if you don’t play your cards right, you likely won’t get a full reimbursement. However, the experienced team of professionals at Risk Reconnaissance understands not only how to accurately assess the likely risks associated with your contract, but how to get you the best rates and chances for full reimbursement as well. With a military background ourselves, we value our government contractors’ patronage and aim to make the process of securing the best DBA insurance plan for your needs as easy and straightforward as possible. Contact us today to learn more about how we can serve you!