Defense Base Act Insurance is a form of Workers’ Compensation Insurance and, as such, requires that an injury be occupational in nature in order for a claim to be payable—in other words, caused by engaging in the assigned work. DBA Insurance is required by law for all contractors and their employees performing work OCONUS. However, when planning for work abroad, contractors should also take into consideration any non-occupational injuries or claims that may affect their employees while deployed, such as heart attack or stroke. How would medical care be provided to employees who suffer these types of ailments?

A Business Travel Accident (BTA) policy is available through several insurance carriers to cover such ailments and can be customized to fit the specific needs of the contractor, including Medical Expense, Medical Evacuation and Accidental Death & Dismemberment coverages.

Medical Evacuation – provides coverage for the cost of transporting an ill or injured employee to a neighboring country or back to their home country if the illness or injury is deemed too serious to treat at the location where it first occurred. This request must be made by the treating physician and authorized by the BTA Insurance carrier.

Medical Expense – provides coverage to pay for non-occupational injuries or ailments for employees deployed overseas. When choosing a Medical Expense limit, contractors should understand that this type of insurance is intended to provide coverage until the employee stabilizes and is able to be transported back to their home country, at which point the Employer’s Group Medical plan would take over to provide benefits and coverage. Medical Expense coverage also covers illnesses where hospitalization isn’t required, such as doctor visits for cold and flu.

Accidental Death and Dismemberment (AD&D) – coverage available in addition to the Disability and Death benefits provided under the DBA policy. The AD&D limit offered under this plan is typically commensurate to the annual salary of the employee, with the maximum limit available being twice or three times the employee’s annual salary.

AD&D coverage typically excludes coverage for Acts of War and Terrorism. However, for an additional premium this exclusion can be removed from the policy in order to provide coverage as a meaningful benefit for employees deployed to military bases or volatile environments. Payments under this AD&D coverage are based on a sliding scale dependent on the extent of the injury.

Since the death benefit provided under DBA Insurance is not payable for singles unless they have legal dependents, a legal obligation such as paying alimony to an ex-spouse, or parents who are legally dependent on the deceased employee’s earnings, AD&D coverage is also a good source for death benefits for unmarried employees. In the case of a covered employee’s death, the full AD&D policy limit is payable to their designated beneficiary.

Please note: When purchasing BTA coverage, it’s a good idea to inquire about what assistance provider the BTA carrier utilizes. In the event of a claim, the fewer number of parties involved, the better. Having the same assistance provider for both the BTA and DBA policies would be ideal so there is only one phone call for the employee to make, regardless of the type of claim.

The LATITUDE DBA Insurance Program, the DBA Insurance broker for Allied World Assurance, is a great source for DBA Insurance. Our team has a deep understanding of the complexities and unique business needs associated with government contracts and deployment overseas, and can assist contractors in creating an insurance plan that protects their business and its employees against overseas exposures. Contact LATITUDE DBA Insurance today!

Employees who work overseas under U.S. Government contract are entitled to benefits under the Defense Base Act. Benefits are similar to those provided by domestic Workers’ Compensation Insurance. This infographic illustrates the employee benefits under DBA.

Second-injury claims (claims that occur when an existing or prior injury is re-injured) are often compensable under DBA and are typically very costly. In most cases, they’re also preventable.

To help reduce the risk of re-injury claims, contractors should consider taking a precautionary step by requiring all employees to undergo a pre-deployment health screening. Vendors can be hired to perform these “fit for duty” screenings which will help to identify any pre-existing illnesses or injuries and decipher whether or not deployment for work under contract to a volatile location, such as a war zone, will exacerbate the condition. Even if the work itself does not involve physical labor, other components of overseas employment such as the necessity to wear gear designed to protect employees living in a war zone―which can weigh 60 pounds or more― could, for example, cause an older person with a pre-existing back condition further injury.

The following two claim examples demonstrate how pre-deployment screenings could have changed employee work orders:

DBA Claim Example #1: As a 51 year old male was exiting a helicopter while working overseas, his foot got caught in a hole. He immediately felt pain in his lower back, which caused him to stumble and fall. He continued working after the injury, but later reported the incident in order to seek medical attention. After two lumbar fusion surgeries and physical therapy, the paid and reserve amount of the DBA claim was nearly $500,000. Had the employer requested pre-deployment screening, the employee’s age-related lower spine arthritis may have been detected, possibly rendering the employee as “not fit for duty.”

DBA Claim Example #2: A male employee in his late 40s was assigned to field service work in Afghanistan and was required to wear 65 pounds of war zone gear as part of the job. While working, he sneezed, causing great pain in his lower back. The man also reported a work-related shoulder injury a few days later. While investigating the claims, records from a military screening performed just prior to deployment indicated the man had been involved in a vehicle accident several years earlier that had required lumbar fusion surgery of the neck and back. Because of the weight of the gear and deterioration around the fusion area, the sneeze caused a herniated disc. This claim is currently reserved at $550,000. Had the employer requested a pre-deployment screening, the employee’s prior surgeries would have been disclosed, possibly rendering the employee as “not fit for duty.”

These claim examples reveal how second-injury claims can often be compensable under DBA, and can also result in large claim expenses. Claim payouts in the hundreds of thousands of dollars will adversely affect a contractor’s loss ratio and, in turn, result in increased DBA premiums. By ensuring all employees undergo a “fit for duty” screening, contractors can help reduce the number of second-injury claims and have a better handle on their overall claims management.

As the DBA Insurance broker for Allied World Assurance, the LATITUDE DBA Insurance team has a deep understanding of the complexities of Defense Base Act coverage, including claims management, and can assist contractors in creating an insurance plan that protects their business and its employees against overseas exposures. Contact LATITUDE DBA Insurance today!

Work performed overseas on military bases and in volatile locations can cause accidents of an unusual nature to occur. The following examples demonstrate how location, environment and job duties can elicit atypical types of employee injury while working OCONUS.

DBA Claim Example #1: A contractor is awarded work to de-mine the vegetation along the naval base in Guantanamo Bay, Cuba. Employees working under the contract use free time to visit the local beaches for some recreational activity. While in the water, one of the employees is bitten by a shark and requires medical attention.

DBA Claim Example #2: An employee deployed to Iraq to work as a pilot breaks his ankle while playing racquetball on the base he is assigned to.

DBA Claim Example #3: An employee responsible for operating cargo screening machines entering bases in Iraq is diagnosed with a bleeding ulcer. Treatment for the condition includes cauterizing the ulcer at a local hospital, followed by recuperation in nearby Jordan. The employee is then evacuated back to the United States but, because military doctors caring for the employee are concerned about a potential “bleed out” of the ulcer on a commercial flight, they require the employee be medically evacuated back to the U.S.

Under domestic Workers’ Compensation Insurance, such claims would typically be denied coverage. Under DBA Insurance, however, such claims are often deemed compensable under the DBA Zone of Special Danger doctrine, which allows coverage for accidents and injuries that occur during “condoned recreational activity” while working in dangerous locations. It also allows for more lenient interpretation of compensability of claims, meaning that activities not normally considered part of the contracted work and/or ailments that transpire over time as a result of adverse working conditions are given consideration due to the contained environment.

Because of the unusual circumstances relating to contracted work performed overseas, it’s crucial that contractors seek the help of a reliable broker to assist them in understanding the nuances of DBA Insurance. As the DBA broker for Allied World Assurance, the LATITUDE team has a deep understanding of the complexities and unique business needs associated with government contracts and the Defense Base Act, and can assist contractors in creating an insurance plan that protects their business and its employees against overseas exposures. Contact LATITUDE DBA Insurance today!