What is the Defense Base Act and What Is DBA Insurance?
The Defense Base Act was established in 1941 with the intention of providing coverage for Americans working in United States bases outside the country. The act was later changed to accommodate government public works contracts for the construction of dams, harbors, schools, and other projects not related to military operations.
Furthermore, the act was amended to cover a whole range of businesses that involved the national security of the US as well as that of its allies. Nowadays, any contract with a US government agency for overseas work, related or not related to the military, requires Defense Base Act coverage. The biggest changes to the Act were enacted in 1958, in which coverage now included to non-American citizens, those involved in Mutual Security Act (1954)-funded projects, and those engaged in morale and welfare services via the United Service Organization.
Defense base act is the counterpart of workers' compensation dedicated to civilian contractors who are engaged in contingency operations abroad, such as in Afghanistan and Iraq. The coverage provides benefits whenever civilian contractors are killed or injured, or kidnapped while working for a US government agency.
Who needs DBA insurance?
As mentioned, anyone working abroad through a government agency needs DBA insurance, whether or not their jobs involve the military to any extent. In detail, these are employees who are working in US military bases or reservations outside the country; involved in US-financed public works outside the US; engaged with a foreign government in a military or public works project that considered vital to US national security; providing US-funded services beyond typical military channels; and working under subcontractors who are part of any contract similar to those mentioned.
What happens in the absence of DBA coverage?
There are stiff penalties for failure to carry DBA insurance. Any government contract clearly provides that bidding contractors have to obtain required insurance, and violation of this provision results in fines and potential abandonment of contract.
On top of that, the most extreme penalty employers may face for not providing DBA coverage is a suit under common law and the waiving of common law defenses. In short, all claimants and their beneficiaries only need to file a suit without having to prove evidence of negligence. Finally, all claims, which are directly against the insured party, can be taken to Federal Court. Such cases tend to be very costly and must thus be taken seriously by all contractors sending people abroad. More of this are available if you research about defense base act insurance carriers.
