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!

Contractors working under U.S. Government contract overseas are required to procure DBA coverage for all of their OCONUS work. For contractors working under U.S. Army Corps of Engineers (USACE) contracts with policies that have expired, or will expire soon, failure to secure new coverage will result in a Stop Work Order being issued by the Contracting Officer when it’s discovered the USACE policy expired and wasn’t replaced.

With the termination of the USACE DBA Insurance program, contractors are now being introduced to the open market process of obtaining DBA Insurance, and it seems that some contractors are using an erroneous method of working with more than one insurance agent or broker to replace their DBA policies. This practice is causing confusion for the insurance carriers since each of the brokers are seeking quotes from the same DBA carriers under the same contractor name.

Why are contractors using multiple brokers? Because when one broker is unsuccessful in obtaining coverage for a contractor—perhaps due to a poor loss experience or large number of employees with low payroll—the contractor moves on to seek the help of other brokers, blanketing the DBA marketplace with their account. This is resulting in DBA Insurance carriers receiving the same submissions numerous times, creating confusion for the brokers and DBA Insurance carriers. It also gives a poor impression of the contractor’s intentions with regard to obtaining DBA coverage.

What contractors don’t realize is that the same DBA carriers are working in the market so working with a new broker will not change the status of their submission. The only way to overturn a declination of coverage from a DBA carrier is for a new broker to submit the contract with updated loss information and changes in exposures, security or payroll information that have not been submitted previously. This will allow the DBA carrier to re-evaluate the submission and determine if they’ll offer coverage.

A better way to work the market

A more efficient way to secure DBA coverage in the open market is to work with just one broker who is knowledgeable in the marketing and procurement of DBA, and it’s astute business practice for contractors to perform a pre-selection process when choosing that broker. By doing so, the contractor can be assured that the chosen broker is one whom will advocate on their behalf and work hard to obtain the best coverage and most competitive pricing available. In order for a broker to do an optimal job in placing coverage, it’s imperative they fully understand the exposures on a contract so the details can be accurately presented to the carriers.

• In the search for a DBA broker, it’s helpful to ask the following questions:
• How many clients do you currently have with DBA coverage?
• What is your total annual DBA premium volume?
• How many years have you been working in the DBA market?
• What DBA carriers do you place coverage with?
• With which carrier do you place the majority of your DBA business? Why do you place the majority of your business with them?
• What are your DBA claim reporting procedures?
• What other lines of coverage should I consider when reviewing the exposures I have for my employees overseas?

Once several brokers have been contacted, the contractor should choose the one that has best exemplified the work they will be willing to do on the contractor’s behalf should they be chosen to represent them. As long as a contractor continues to work overseas on U.S. Government contracts, DBA coverage will be needed, and a DBA broker should be viewed as a lasting partner that will ensure compliance with DBA requirements for the long-term.

Selecting a DBA broker is a crucial component to contract management. LATITUDE DBA is a broker you can trust. With more than 25 years of experience and extensive knowledge of the DBA marketplace, we can assist you in exploring your coverage options. Contact the LATITUDE DBA Insurance program today to begin a review of your DBA needs.

With the U.S. involvement in the war on terror in Iraq and Afghanistan, the DBA exposure for contractors and DBA Insurance carriers has changed significantly due to the hiring of locals native to the country where work is being performed. Like U.S. workers employed under DBA contracts, locals are also eligible for DBA benefits. This eligibility creates a number of challenges in the claims management process—ranging from cultural differences to financial disparities. Some of these challenges are outlined below:

Injury during commute

Typically, a local working in their home country under a contract that requires DBA is not entitled to DBA benefits if they are injured or killed during their commute to or from a work site. Commuting to and from a location under watchful eye by insurgents is a known occurrence, and claims for injury or death during a commute are only compensable if it can be proven the employee was the victim of a retaliatory attack by insurgents as a result of their employment by Westerners.

Proof of wages

For DBA carriers to pay loss of wages benefits, proof of wages for work performed by the injured or deceased employee must be presented for the previous 12 months. While wages in the U.S. are typically documented by an employee’s tax filing or W2 statement, many workers in third-world countries are paid by local employers in cash and wages are not carefully documented. In order for wages to be proven at the time of an injury or death, it’s imperative that wages be documented. Contractors with overseas contracts need to keep record of the wages for local workers via a wage statement so that it can serve as confirmation later, if needed.

Volatile environments

Due to volatile situations in many countries, locals often fear being terminated from their employment or even killed for accepting DBA benefits and, therefore, often hesitate to admit they have been injured on the job. It’s very important that local employees are educated about their rights to receive DBA benefits if they are injured and, likewise, employers and DBA Insurance carriers must be cognizant of the risks the employees face in collecting benefits.

Proof of marriage and birth

In order to provide a death benefit payment to a surviving spouse and eligible surviving children, DBA requires that both marriage and birth certificates of all dependents and for the deceased employee be presented to confirm ages and authenticate legal status as dependents. However, in some countries, such as Iraq and Afghanistan, births and marriages are not documented as precisely as they are in the U.S. Oftentimes a birth is only written in a book in the family home—a more formal record isn’t made. Because of the differences in how these types of events are recorded, many DBA carriers have agreed to accept alternate proof of marriages and births in recent years based on Department of Labor approval. This could include a written statement by a judge or tribal leader who performed a marriage ceremony, or a statement by a brother advising of a marriage and ensuing births of the children as a result of the union.

Unmarried workers

If a single person who lives with and supports his or her parents is killed during employment, the parents are entitled to a reduced death benefit assuming it can be proven that the employee was the sole source of income supporting the family.

Protection for widows

In many cultures, surviving female spouses are not entitled to receive death benefits if their husband is killed. Since accepting DBA benefits is often viewed as receiving aid from the Western culture, DBA carriers must be diligent to protect the anonymity of these widows in order to help prevent a threat to family members by insurgents.

Hindrance of benefits delivery

Many locals in the Middle East do not have access to banking systems, making electronic delivery of DBA benefit payments problematic. Likewise, there is not a reliable mail delivery system, which also renders the delivery of a payment by check to beneficiaries difficult. To assist in the transfer of benefits to entitled recipients, DBA carriers will often use a vendor to assist the local with establishing a bank account in order to receive DBA benefits via wire transfer. Again, precautions must be taken so as to not jeopardize the identity and security of the beneficiary.

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 and the benefits entitled to covered employees. Contractors with questions about coverage or those seeking DBA coverage should contact LATITUDE DBA Insurance today.

Defense Base Act (DBA) is a form of Workers’ Compensation insurance that provides benefits to workers performing work overseas under contracts for the U.S. Government. Benefits under DBA include loss of wages, medical expenses, medical evacuation, rehabilitation services, and repatriation of mortal remains and funeral expenses.

Loss of Wages

In the event of an injury to an employee working OCONUS, a formula is used to determine the dollar amount the employee receives to recover their lost wages while unable to work. The formula is 66-2/3% of the average weekly wage for the 12 month period prior to the injury. However, if the loss of wage benefit payments do not meet the prior financial needs of the injured worker, the DBA carrier will often pay a partial benefit to the worker, using another formula, to yield an amount closer to their regular earnings. All total earnings are subject to a weekly wage cap, currently set at $1346.68. The loss of wage benefit is paid tax-free, is not combinable with any other benefit, and is paid to the employee until the time he or she is released to return to work with the exception of the following:

Permanent Total Disability – If the injured worker is deemed permanently unable to return to work, the loss of wage benefits are paid for life to the injured worker. As the U.S. Department of Labor increases the weekly wage cap to adjust for cost of living increases, loss of wage benefit amounts are simultaneously increased.

Death – If a worker is killed in the course of their employment resulting in a compensable claim, a death benefit is paid to his or her survivors. For surviving spouses only, a death benefit of 50% of the average weekly wage is paid for the life of the surviving spouse, or until he/she remarries, at which time a lump sum benefit equaling two years of benefit payment is made to the spouse. The death benefit amount increases to 66-2/3% of the average weekly wage if there are one or more minor children. The minor children receive benefits until age 18 (age 23 if a full-time student). If there are only surviving children (no surviving spouse), the children will split the total amount of the benefit equally. The total amount paid to all survivors will not exceed the weekly wage cap as set by the U.S. Department of Labor. Death benefits also increase annually to accommodate a cost of living adjustment.

Medical Expenses

Medical expenses that are attributable to a compensable claim are paid by the DBA Insurance carrier until the claim is closed. While an injured worker is entitled to choose their treating physician once they’ve returned to the U.S., they are dependent on whatever medical facilities are available in their location. However, the DBA Insurance carrier has the right to request an independent medical examination by a physician of their choice as a second opinion.

In addition, the DBA Insurance carrier will oftentimes assign a Nurse Case Manager to assist in the coordination of care for the injured worker. This is common in cases where an injury is severe or it appears recovery time will be lengthy, and is done not only as a cost-control measure for the insurance carrier, but as an assurance that the injured worker receives the best possible care.

Medical Evacuation

In cases where an injury is severe and the local medical facilities are unequipped to provide the necessary medical treatment, a medical evacuation will be authorized by the treating physician in the country where the injury occurred so the injured worker can be transported to his or her country of citizenship. The DBA Insurance carrier will coordinate the actual medical evacuation and make payment for the related costs.

However, if the injured worker is able to be transported on a commercial airline, the DBA carrier will not pay for the cost of the evacuation. In cases where an injured person is able to fly on a commercial airline, but requires expanded space (such as what’s offered in first-class seating), the DBA carrier will pay the difference in the price for the upgraded ticket.

Vocational Rehabilitation

If an injury forces a covered employee out of the type of work he or she is accustomed to doing (such as the work they were performing overseas), rehabilitation services are coordinated by the U.S. Department of Labor to train the injured employee in a new occupation. These services are only available for U.S. nationals residing in the U.S.

Repatriation of Mortal Remains

The DBA Insurance carrier will pay for the return of mortal remains of a deceased worker to their country and city of residence. A funeral benefit of $3,000 is also afforded under DBA policy.

Just as U.S. employers are required to provide Workers’ Compensation benefits to their employees, affording benefits to workers going overseas for employment is a vital part of doing contract work for the U.S. Government, and is required under Federal Law. Employees and their families can feel confident that the risks of working in remote parts of the world are covered by DBA benefits.

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. Contact LATITUDE DBA Insurance today―we’re here to assist you in creating an insurance plan that protects your business and its employees against all your overseas exposures.