It’s the start of 2022 and already the number of OCONUS awarded contracts have started to roll in to many government contractors across the US and around the world. DBA Insurance or Defense Base Act Insurance is a critical contract requirement that must be considered. This topic and more can be found on www.riskreconnaissance.com or by reaching out to the author.

Each year, thousands of DBA insurance policies renew without any pomp or circumstance, typically with the same rate as last year and likely the same operations if the contract has continued. But are you taking full advantage of the cost saving measures that may be right in front of your eyes?

5 Considerations for DBA Insurance

There are 5 areas of consideration that may offset high premiums, excessive coverage, and contractual non-compliance. DBA Insurance Should Be Updated Annually

1. DBA Insurance Rates Are Negotiable – Chances are if your DBA Insurance renews each year without any dialogue between you and your insurance broker, the rates in place are likely higher than necessary. Consider the claims history, number of years you have been with the insurance carrier providing the DBA insurance, and the type of work being performed. Resting on your laurels will cost your company money. Even a small decrease in the rate could translate into saving thousands if your payroll is high. REVIEW YOUR RATES AND SEEK A RATE REDUCTION IN 2022.
2. DBA Insurance Is Mandatory For OCONUS Contracts – When was the last time you verified the current OCONUS contracts against those listed on your Defense Base Act insurance policy? Risking contractual non-compliance due to a new contract or a contract not listed or covered by DBA insurance could jeopardize your KO relationship and even the contract. Furthermore, for any contract not covered with DBA insurance the government contractor runs the risk of funding a claim that could thousands of dollars. CHECK YOUR CURRENT CONTRACTS WITH THOSE COVERED BY YOUR DBA INSURANCE PROGRAM.
3. DBA Insurance Quotes Are Not Always Required For RFP’s – Obtaining quotes for contracts in the bidding stage can be time consuming. Unless specifically demanded by the KO, you may be able to simply obtain a letter from your DBA Insurance Broker indicating a quote is readily available. Furthermore, without a formal quote, your DBA Insurance Agent may be able to offer a rate estimate to fulfill your need of accurate pricing. If your contracting department seeks quotes for every contract opportunity, it may be time to find an insurance professional that can streamline their submission strategies.
4. DBA Insurance Operations Need To Be Verified – If you have more than one OCONUS contract or a contract with multiple operations, ensuring those operations are properly identified is critical to proper insurance coverage. Over time it is not uncommon for government contractors to expand or contract work resulting in an operational shift. Although the payroll will be picked up at audit, the operations for the coverage needs to be articulated to the insurance carrier. IN 2022, REVIEW YOUR OCONUS OPERATIONS LIKE YOU WOULD YOUR CONTRACTS TO ENSURE THEY ARE PROPERLY COVERED.
5. DBA Insurance May Have Shifted Due To The Afghanistan Withdrawal – If your company was in Afghanistan and was required to pull out immediately, you may be able to negotiate a return premium with your insurance carrier. Many DBA Insurance policies are 100% minimum earned, meaning that the premium paid at the start of the contract will be the minimum paid to the insurance company. Regardless of this insurance contract provision, your underwriter may allow for a reduced premium or even a returned premium due to the pull out. How do you find out if this is possible? Simply…Work with an experienced DBA Insurance Broker. He/she will be able to connect with your underwriter and seek relief. AFGHANISTAN PULL OUT MAY AFFORD PREMIUM RELIEF IN 2022 AGAINST YOUR 2021 INSURANCE POLICY.

Defense Base Act Insurance Is Required

Defense Base Act Insurance is a required benefit program via the FAR and DFAR. Working with your insurance professional in the proper way can save time, money, and valuable resources. Identify which, if any, of the aforementioned points make the most sense for your company. Make 2022 work for you and your OCONUS contracts.

Brian Smith is an insurance broker with the Insurance Office of America.  He can be reached at brian.smith@ioausa.com or by phone at (404) 918-4775 cell.

Visit www.riskreconnaissance.com for more information regarding DBA Insurance and other coverages for government contractors.