What is the Defense Base Act (DBA)?
Defense Base Act Insurance covers private employers working on military bases or on any lands used by the USA for military reasons 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.
Who Requires Defense Base Act Insurance?
- 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 like numbers 1-4 above.
Facts to consider about DBA Coverage?
- The DBA applies to all employees, not just to U.S. citizens.
- The DBA applies to foreign employers employing only third country nationals.
- The DBA applies to the prime contractor and to every subcontractor.
- The language in a government contract does not determine whether the DBA applies. If the government contracting officer makes a mistake and does not require DBA coverage, then it is the contractor/employer who faces the consequences of being uninsured.
- The DBA applies regardless of the length of the contract, whether just a few days, a year, or longer.
- There does not necessarily have to be a causal relationship between the employment of the injured worker and the injury, nor is it even necessary that the employee be engaged at the time of the injury in an activity of benefit to his employer. All that is required is that the “obligations and conditions” of employment create the “Zone of Special Danger” out of which the injury arose. This is sometimes inaccurately referred to as 24-hour coverage.
What are the consequences of not carrying Defense Base Act Insurance?
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.