When government contractors take on projects overseas, securing Defense Base Act (DBA) insurance becomes a legal requirement. New businesses pursuing international contracts with the U.S. military or other government agencies must fulfill DBA insurance requirements before work begins.
Failure to obtain proper coverage can derail overseas ventures and leave contractors uninsured for injuries, disabilities, or deaths occurring on the job site. DBA insurance provides workers’ compensation-style benefits for incidents that happen abroad.
It covers medical care, lost wages from injuries or illnesses, and even death benefits for families in tragic cases. While DBA insurance may seem complex, new contractors can meet requirements by knowing who needs coverage, when policies must be in place, and how to file claims correctly.
Who Needs DBA Insurance?
The Defense Base Act applies to nearly all government contractors performing work overseas on behalf of U.S. interests. The major categories requiring DBA insurance include:
- Contractors working on U.S. military bases or any overseas military installations operated by the U.S. government.
- Contractors carrying out public works projects outside the U.S. that receive funding from government agencies.
- Contractors providing services abroad that support operations of the U.S. armed forces or military initiatives.
- Subcontractors working on contracts and projects that fall under the U.S. Foreign Assistance Act.
The nationality of workers is irrelevant in most cases. Local foreign workers, U.S. workers abroad, and third-country nationals need DBA coverage when meeting any of the above criteria. The rare exceptions are foreign workers who acquire waivers exempting them from mandatory DBA insurance.
DBA Insurance Requirements for New Contracts
One key requirement is securing DBA insurance before operations begin overseas. The insurer must approve the policy, making coverage active from day one abroad. Starting work before obtaining DBA insurance violates regulations.
Government agencies do not pay for a contractor’s DBA insurance; the contractor bears full responsibility for premium costs. Renewing policies annually throughout multi-year contracts remains the contractor’s obligation as well.
It’s advisable for contractors to begin the DBA insurance process 60 to 90 days prior to starting overseas work. This ensures sufficient time for insurers to assess risks, develop a customized policy, and officially activate coverage by the project start date. Rushing this process may cause gaps in protection.
Contractors should expect insurers to closely scrutinize their industry experience, safety record, risk mitigation strategies, and plan for managing claims. Lack of proper preparation may delay policy approval. Insurers also require new contractors to pay policy premiums upfront before work begins.
Key Coverage Details New Contractors Need to Know
DBA insurance policies offer expansive medical and disability benefits for overseas incidents. This includes:
- Around-the-clock accident coverage instead of limiting it to work hours. Employees receive medical care for both on and off-duty incidents.
- Medical expense coverage for treating injuries and illnesses without caps. DBA insurance pays for hospitalizations, surgeries, therapies, and medication.
- Weekly disability benefits for lost wages during recovery periods. DBA insurance replaces two-thirds of the employee’s average weekly salary, up to $1,030 per week.
- Permanent disability benefits if a person is unable to return to their previous work. These lifelong payments may increase with inflation over time.
- Death benefits equal to half the worker’s salary paid to a surviving spouse and children. More survivors mean higher percentages of the salary replaced.
Insurers can directly arrange emergency medical evacuations from foreign sites using an extensive provider network abroad. This prevents delays that can compound health issues.
Properly Filing Claims
Missteps when reporting claims and seeking reimbursement for care will frustrate new contractors. DBA insurance requires strict adherence to claims procedures.
Contractors must immediately notify the insurer of any injury, illness, or fatality occurring on an overseas job site. Even minor incidents should get reported right away rather than waiting to see if care becomes necessary.
Filing paperwork correctly also becomes important. The Employer’s First Report of Injury form needs to be submitted within 10 days of an incident. Contractors must provide all details about what happened and the resulting impacts on the employee. Failing to meet deadlines may delay benefit authorization.
Throughout medical care, contractors should expect the DBA insurer to arrange treatments and services through their networks. Trying to circumvent this process often results in denied claims. Letting the insurer coordinate medical logistics results in the quickest access to care and reimbursement.
Understanding Waivers
In limited instances, contractors can pursue DBA insurance waivers, releasing them from mandatory coverage requirements. The two main waiver routes include:
- Geographic waivers when projects occur in countries with adequate local workers’ compensation systems. The U.S. Department of Labor must confirm the foreign system offers equal benefits. Waivers apply to local nationals and foreign workers covered under the local system.
- Contract-specific waivers when contractors prove they are self-insured for workers’ compensation equivalents. Again, the benefits must mirror DBA insurance. These waivers usually apply only to U.S. resident employees abroad and third-country nationals. Local workers still need DBA coverage.
Contractors should understand waivers require extensive approval processes. They must demonstrate why DBA insurance is excessive or redundant. The waiver process also takes significant time, so contractors should begin it well before deployment abroad.
Don’t Go Overseas Without CI Solutions Guiding Your DBA Insurance
As government contractors expand globally, properly understanding Defense Base Act insurance becomes essential. New businesses can avoid coverage gaps, denied claims, and other headaches by securing policies before deploying.
CI Solutions’ DBA insurance experts have guided contractors through requirements for years. If your business is venturing abroad for the first time, contact us today at 703.988.3665 or online. We’ll help you put a DBA insurance plan in place so you can meet requirements and work overseas with total peace of mind.