Base Act Insurance
What is Defense Base Act Insurance?
Defense Base Act (DBA) insurance is a special type of workers compensation insurance to
protect employers and contractor employees working on
public sector projects outside of the continental United
States. Higher benefit levels are provided for eligible
workers and the work day is extended to 24 hours per
day which increases the employer's potential liability
for work-related injury, sickness or disease.
Established in 1941, the primary goal of the Defense
Base Act was to cover workers on military bases outside
the United States. The act was amended to include public
works contracts with the government for the building
of non-military projects such as dams, schools, harbors,
and roads abroad. A further amendment added a vast array
of enterprises revolving around the national security
of the United States and its allies. Today,
almost any contract with an agency of the U.S. government,
for work outside the U.S., whether military in nature
or not, will likely require Defense Base Act coverage.
Information Courtesy of AIG
Who Requires DBA Coverage?
- Any employee working on a military base or reservation
outside the U.S.
- Any employee engaged in U.S. government-funded
public works business outside the U.S.
- Any employee engaged in a public works or military
contract with a foreign government which has been
deemed necessary to U.S. national security.
- Those employees that provide services funded by
the U.S. government outside the realm of regular military
issue or channels.
- Any employees of any sub-contractors of the prime
or letting contractor involved in a contract such as
numbers 1-4 above. Information
Courtesy of AIG WorldRisk
What are the consequences of
not carrying DBA coverage?
Failure to obtain DBA insurance carries stiff penalties.
All government contracts contain a provision that requires
bidding contractors to obtain necessary insurance. Failure
to do so will result in fines and possible loss of contract.
The additional and most severe penalty is that employers
without DBA coverage are subject to suits under common
law, wherein common law defenses are waived. In other
words, the claimants or their heirs need only file suit
and do not have to prove negligence. Lastly, all claims
may be brought in Federal Court and are against the
insured directly. Information Courtesy of AIG WorldRisk
For more information about Defense
Base Act insurance:
MOODY offers periodic seminars and can provide information
to qualified individuals and companies on the topic
of Defense Base Act Insurance.
For details, contact:
Moody, Director of International Programs