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!