Understanding Defense Base Act Coverage

When an overseas project is approved or financed by the U.S. government, a special workers’ compensation program is required to protect employees working abroad. Such coverage requirements that employers must meet are defined under the Defense Base Act.

What Is the Defense Base Act?

The Defense Base Act (DBA) requires employers to protect civilian employees working in foreign countries with workers’ compensation to cover injury or illness, regardless of their nationality. The DBA is a federal law administered by the U.S. Department of Labor, Office of Workers’ Compensation Programs, and the Division of Longshore and Harbor Workers’ Compensation. DBA required insurance is mandatory and non-compliance is punishable as a misdemeanor which can result in fines and/or up-to a year of imprisonment.

Defense Base Act History

Originally the Defense Base Act was passed into law in 1941 as the United States was on the verge of World War II to provide workers’ compensation benefits to those private civilians working for private contractors on military bases overseas. Over time, this act has expanded.

DBA mandated coverage is now necessary for private contractors on military bases as well as employees who work on public contracts, such as engineers, project managers, consultants, and contractors. Employers providing military services will also need to seek out insurance that is compliant with the DBA. This coverage also applies to those who work for nonprofits and educational institutions abroad.

What Does the Defense Base Act Cover?

The Defense Base Act is very broad in required coverage. Those insured can receive benefits typically associated with workers’ compensation such as medical costs coverage and rehabilitation due to injury or illness. It is also important to note that the cause of the incident can occur over the duration of employment, meaning it does not have to occur during designated work hours in order for a claim to be made and compensation to be received. Benefits can also include short and long-term disability and cover loss of wages or income. Death benefits are included in the Defense Base Act and will be paid to survivors such as spouses and children. There are a variety of supplementary coverages and optional plans that include coverage for kidnapping, extortion, and accidental death and dismemberment.

How To Obtain Defense Base Act Coverage?

Coverage that meets the requirements of the Defense Base Act can be obtained through approved insurance companies. Contractors can also request approval to self-insure, but if that is not an option it is important to seek out DBA insurance providers who are approved by the Department of Labor and understand the requirements of the law. Depending on the type of employment, contract, or work location, it might also be necessary to find a provider with medical evacuation and assistance services in case of emergency.

When looking for a Defense Base Act insurance provider, it is essential to find one with underwriters who have experience with DBA coverage and are well versed in the act’s requirements. Seek out a provider with experience in claims management, like Insurance Office of America (IOA). Co-founded by John Ritenour and led by Chairman and CEO Heath Ritenour, IOA has a global network of support with over 50 locations across the United States and in London. Like any need for insurance, choose a provider who will assess risks and provide the coverage that meets the needs of your employees.