Defense Base Act (DBA) Insurance

In general, Defense Base Act insurance coverage provides disability, medical, and death benefits to covered employees injured or killed in the course of employment.

Workers’ Compensation provides coverage for employees who get injured on the job. DBA acts as an extension of workers’ compensation insurance covering civilian employees working on US Government contracts overseas. DBA has special rules that govern its coverage policies. For instance, government contractors can only purchase DBA coverage from an insurer approved by the US Department of Labor.

While workers’ compensation laws can vary from country to country, DBA applies to US Federal Law, as all independent government contractors and government contracting agencies must obtain DBA coverage, including for locals and foreign nationals.

You need Defense Base Act insurance for any public works contract you carry out overseas, unless you are operating in a waiver country and have obtained the local workers compensation scheme for your local national employees, or you have a waiver from the Secretary of the Department of Labor.

Employers who don’t obtain DBA insurance could face steep penalties, including misdemeanor convictions, fines and possible jail time. For corporations, officers can be held responsible for not obtaining DBA benefits as stated under the law.

Notify your insurance carrier (or your claims administrator, if you’re self-insured) as soon as you become aware of an injury or death. Medical treatment should be authorized immediately if it is needed.

An Employer’s First Report of Injury, Form LS-202, must be filed with the OWCP within 10 days of the injury, if it causes loss of one or more work shifts. The Form LS- 202 may be filed electronically. Notice should be sent to DLHWC’s Central Case Create site below. This site creates cases for all new injuries, regardless of the location of injury or claimant’s home address. After the case is created, it is viewable electronically by the District Office with jurisdiction for the case.

U. S. Department of Labor
Office of Workers’ Compensation Programs
Division of Longshore and Harbor Workers’ Compensation
201 Varick Street, Room 740
Post Office Box 249
New York, NY 10014-0249

The cost of your workers’ comp insurance depends on several factors, including but not limited to:

• the location of your contract
• the scope of the work involved
• the size of your payroll
• your DBA insurance loss history
• the US government agency associated with your contract

Once the underwriter determines an effective DBA insurance rate, that rate equals the total cost of the payroll. To calculate your totals, use the equation below:

DBA Rate x Total Payroll = Annual DBA Cost

If you have a minimum cost or minimum premium due to small payroll exposure, this may not apply.

DBA insurance lets government contract workers collect up to two-thirds of their weekly pay if they get injured on the job. While DBA doesn’t have a minimum compensation rate, the current maximum payout employees can receive is $1,030.78 per week. Weekly payouts are also available for partial loss of earnings. Additionally, DBA entitles injured employees to choose their own doctor when seeking medical treatment.

Yes, DBA insurance is an allowable cost, but your reimbursement level may vary. Some contracts only allow for the most inexpensive plan technically acceptable, which generally only allow partial reimbursement. Other contracts list DBA coverage as a fully reimbursable expense. Clements has direct access to multiple carriers, so you can be certain you’re getting the lowest pricing.

Yes, foreign nationals are required to have Defense Base Act insurance. The exception would be if you are operating in a waiver country, and you have the local state scheme workers compensation. Individuals of any nationality may claim DBA benefits.

DBA coverage can also extends to government contractors stationed in hazardous areas internationally under the Special Dangers Doctrine. For instance, your DBA policy would cover your employees if you sent them base in Sierra Leone and they got injured in the building they were staying in due to poor housing conditions.

While government contractors must carry Defense Base Act (DBA) insurance, waivers allow both contracting agencies and independent contractors to purchase alternative workers’ compensation.

Who Can Qualify for a DBA Waiver?

Waivers must be approved by the Secretary of Labor. Waivers do not apply to US citizens, legal residents or any employees hired in the US. Check out the US Department of Labor’s website to learn more.

Those who can get approved for waivers include:

• Local Country Nationals (as long as they’re not US citizens)
• Third-Party Nationals (Non-US expats)