Defense Base Act (DBA) insurance covers civilian employees who work in foreign countries to support the United States military. It’s essentially a form of workers’ compensation insurance for government contractors. Both U.S. citizens and foreign nationals are eligible for DBA insurance. Here is a close look at this type of insurance coverage.
What Is The Defense Base Act?
The Defense Base Act was passed in 1941, just a few months prior to the U.S.’s entry into World War II. It was initially created to provide civilian employees working abroad with workers’ compensation benefits. The law was eventually expanded to include more workers, such as American employers who provide welfare or other similar services to the armed forces outside the U.S.
The DBA is also an extension of the Longshore and Harbor Workers Compensation Act (LHWCA), which offers benefits to land-based maritime workers who sustain injuries on the job. These benefits include medical care, short and long-term disability, and rehabilitation.
Cost & Benefits Of DBA Insurance
The DBA provides the three primary workers’ compensation benefits whether or not the injuries occurred during work hours. According to the Labor Department, the DBA provides compensation for total disability equal to two-thirds of an employee’s average weekly income, or up to $1,030.78 per week.
Meanwhile, death benefits are half of the employee’s weekly earnings and are provided either to the surviving spouse or to one child, and two-thirds of income for two or more surviving relatives, up to the existing maximum weekly rate. These benefits may be payable for life.
There are two doctrines that are key to the broad coverages that DBA insurance provides. The first is the Zone of Special Danger doctrine, which states that if an employee is placed in a danger zone as part of his/her employment conditions, an accident that results in injury or death does not need to be related to job responsibilities in order to trigger DBA benefits.
The second doctrine is Reasonable Recreation, which states that an employee’s injury or death can trigger DBA benefits even if it occurs during funded recreational activities.
Failure To Obtain DBA Insurance
Penalties for failure to acquire DBA insurance can often be severe. These include fines and loss of contract. In certain cases, employers without DBA coverage may be subject to lawsuits in which claimants do not need to prove negligence.
An employer who is found guilty may be fined up to $10,000, imprisoned for up to one year, or both. All claims may be brought in Federal Court.
Speak To The Northern VA Commercial Insurance Brokerage
Reach out to the commercial insurance professionals at CI Solutions to learn more about DBA insurance. We are an independent Northern VA commercial insurance brokerage that is dedicated to providing comprehensive insurance solutions to clients of various backgrounds.
We will always explain policy coverage and provide expert recommendations based on your unique needs. Give CI Solutions a call today at 703.988.3665 or contact us online for more information about our DBA insurance policies.