Defense Base Act (DBA) Insurance is a form of Workers’ Compensation Insurance required by the U.S. Department of Labor that is designed to provide benefits to employees working overseas to complete the contracted work. Contractors who have secured a contract with the U.S. Government to complete work overseas on military bases or other public works projects need to secure DBA Insurance before employees are deployed to begin the work.
To apply for DBA Insurance, contractors need to provide information about their business and the contracted work to an insurance agent who is well-versed in placing DBA Insurance. It’s important to be thorough in the information provided, giving as much detail as possible about the work to be done. This will help the insurance company underwriters provide the most competitive rate possible.
What information needs to be submitted to obtain a DBA Insurance quote?
A completed DBA Insurance application—While all contracts will be included under the same DBA Insurance policy, contractors will need to complete a separate DBA Insurance application for each contract secured with the U.S. Government. The application is provided by the insurance agent, and includes questions regarding:
- Number of employees to be deployed and their class of work
- Total payroll for all employees
- Employee concentration (i.e. number of employees per flight, per land conveyance, per work location, etc.)
- Underwriters don’t want to see more than 5 employees per flight due to the potential for a catastrophic loss
- Good risk management for the contractor—could they afford to lose more than 5 employees at any one time should the plane crash?
Statement of Work (SOWs)—Required for each work contract, a Statement of Work is a comprehensive description of the project and the work to be completed. If the SOW is “classified,” be sure to state that on the application and provide a detailed statement of services in lieu of the SOW.
The Statement of Work is issued by the USG agency awarding the contract and will include any special distinctions or requirements of the contract. For example, a contract may require that employees carry a weapon for their personal protection due to the volatile environment in which they will be working. In a case like this, details of the requirement will need to be provided, including which employees will be armed and what training they’ve had on proper handling of the devices.
DBA Claim Loss Runs—The insurance underwriter will ask to review DBA claims history for the previous five years. The contractor will need to request loss runs (also called loss history) from the insurance carrier with whom coverage was placed in the past. If this is the contractors first time purchasing DBA Insurance, that fact should be indicated on the application.
The contractor’s insurance agent will assist in preparing these documents and, once complete, will submit the documents to carriers in the DBA Insurance market. The underwriters will review the submission and, in some cases, may ask for clarification or additional information in order to assess the risk and prepare a coverage proposal and quote.
As the DBA Insurance broker for Allied World Assurance, The LATITUDE DBA Insurance Program is a great option for DBA Insurance. Our team has a deep understanding of the complexities and unique business needs associated with government contracts, the Defense Base Act and DBA Insurance. Contact LATITUDE DBA Insurance today―we’re here to assist in the DBA Insurance application process and the creation of an insurance plan designed to protect a contractor’s business and its employees against all overseas exposures.
