What Does DBA Insurance Cover? Everything Employers Need To Know

DBA insurance seems like a complex matter. In reality, it isn’t. We simply associate anything having to do with government as convoluted and complicated.

Don’t believe us?

As an employer, here’s everything you need to know about DBA insurance, including what does DBA insurance cover and which employment activities DBA is associated with. 

What is DBA insurance?

Defense Base Act (DBA) insurance can be easily described as workers’ comp for employees working overseas on US military bases or fulfilling a contract with the government for purposes of national defense or public work. 

All employers and subcontractors must obtain this insurance.

Is it possible to avoid purchasing DBA insurance?

Only when employing local workers where local workers’ compensation laws apply. This is referred to as a DBA waiver.

Is the DBA insurance the only insurance policy you need?

While a DBA insurance policy is the only one you’re legally required to purchase, you can benefit by buying optional insurance policies. Some of them include kidnap and ransom policies, business travel accident insurance, and life insurance.

What does DBA insurance cover?

DBA coverage provides disability benefits, medical benefits (including therapy for those dealing with trauma-related mental health injuries), and death benefits. In addition, it offers indemnity for lost wages. 

How much can employees with disabilities receive?

Those with total disability are eligible for two-thirds of their average weekly wage. The amount is calculated using tax forms, payroll documents, and Social Security records. 

To which employees does the DBA not apply?

DBA coverage won’t apply to death or injury of employees subject to the Federal Employees Compensation Act, workers fulfilling casual roles not part of the trade of the employer (domestic or agricultural service), or members of crews on any vessels.

Does DBA only provide coverage for US citizens?

Negative - DBA applies to all paid workers, regardless of their nationalities. This means that employers are legally obligated to secure DBA coverage for all US citizens, local hires, and third-country nationals under their employment contract.

Can other coverage programs replace DBA coverage?

While you can freely use other insurance programs as supplemental coverage, they’re not a substitute for mandatory DBA coverage.

Can you purchase short-term DBA coverage?

Many companies provide work for the US government on short-term projects (e.g. a month). However, there are currently no short-term policies available and DBA coverage is generally active for 12 months. 

Do you need multiple insurance policies if you have more than one contract?

Some DBA policies cover multiple task orders. Depending on the insurance company, they may assign different contracts to a singular policy. 

It’s worth noting that if your contracts are located in different locations and vary in scope, you may need multiple policies. 

This isn’t to say you can’t negotiate with the insurer to centralize everything into a single policy contract, as this allows for easier accounting. 

Does DBA provide 24-hour coverage?

Defense Base Act insurance only provides benefits for lost wages and injuries stemming from work-related conditions. It’s active during work periods but doesn’t cover any external activities like periods of R&R, travel during breaks, excursions, and so on. 

Do all insurance companies provide DBA policies?

Although most insurance companies have the means to do so, many have opted out of providing DBA coverage. Still, don’t be discouraged if your regular insurance provider doesn’t support it, as plenty of insurance carriers do.

Is it possible to check if your subcontractor has an active DBA insurance policy?

You can request a certificate of insurance from the subcontractor via your administration or contracts department. This certificate will include all relevant information such as the carrier, policy number, and date of expiry. You can then verify if the coverage is active by reaching out to the insurance carrier. 

What work-related activities are covered by DBA?

Here’s a list of all employment activities that DBA applies to:

• Work for private companies providing services on military bases, or any countries used by the USA for military purposes overseas (including US possessions and territories).
• Work under public work contracts with US government agencies, such as service or construction contracts related to war activities or national defense purposes outside US soil. 
• Work on contracts funded by the US in accordance with the Foreign Assistance Act, which may include providing services and the sale of materials or military equipment to US allies outside US soil.
• Providing support to US employers who supply services such as welfare to the Armed Services.

DBA also covers injuries and death that occur during transportation of a covered employee from or to the place of employment in cases where the US government organized and paid for said transportation.

What happens if an employer fails to provide DBA insurance?

If an employer falls under the requirements of providing coverage and fails to secure compensation under DBA through an authorized insurance carrier or doesn’t provide the ability to the employees for self-insurance, they could face criminal prosecution and may be punished with extensive fines or even imprisonment. 

When it comes to corporations, their secretary, treasurer, or the president could face personal prosecution and may be held liable for the benefits. 

Injured employees can file a claim under the DBA or file a civil suit for damages under the state personal injury laws. This can be tricky for the employer as they won’t be able to rely on usual tort defenses like those that claim the employee contributed to their injury through their negligence. 

Lastly, failing to obtain DBA coverage also leads to the company being considered non-compliant, which can affect future contract awards and negatively impact insurance performance standing. 

Does DBA insurance have deductibles for lowering the insurance premium?

With most workers’ comp plans, deductibles can be used to lower the premiums. In contrast, DBA policies fall into the category of guaranteed cost, meaning they don’t have any deductibles.

Keep your workers safe

Now that you’re familiar with what does DBA insurance cover, we hope you’re less apprehensive about purchasing this policy. After all, the main idea behind it is to protect employees from harm and ensure that they can recover if anything goes wrong in their line of work. 

Considering the consequences of failing to obtain this coverage are extensive, you don’t want to risk anything. 

If you have any questions about the Defense Base Act, feel free to reach out to the Law Offices of RITE at (904) 500-RITE (7483) or info@rite4justice.com.

Note: 

The information in this blog post is for reference only and not legal advice. As such, you should not make legal decisions based on the information in this blog post. Moreover, there is no lawyer-client relationship resulting from this blog post, nor should any such relationship be implied. If you need legal counsel, please consult a lawyer licensed to practice in your jurisdiction.