Contractors with DBA Insurance coverage expiring in the next twelve months through the U.S. Army Corps of Engineers (USACE) program need to be aware that the end of the program on October 1, 2013, will affect their existing project bids/awards. Because DBA Insurance must be purchased on the open market when their current policy expires, contractors with a 12-month contract using a construction rate of $4.25 on the bid, for example, could see a construction rate increase to as much as $8.00-$10.00 for the performance period remaining on their existing contract. Similarly, a contractor not currently insured through the USACE program with a contract bid awarded after October 1st, will have to market their contract award to obtain an updated DBA rate/proposal.
Contractors in either one of these situations may be able to get help from their USACE Contracting Officer (CO) by requesting that their existing contract be modified to reflect the higher DBA premium they will be required to pay for the remainder of the contract. The modification will allow for additional funding needed to cover the additional DBA premium. However, if a contract is a “firm fixed” price contract, the contractor could face resistance from their CO regarding modifications. In this situation, the CO may opt to contact the USACE headquarters for clarification of their position.
As contractors begin their search for DBA Insurance coverage on the open market, they will undoubtedly be presented with significantly higher rates, and their DBA premium will most certainly increase. As a frame of reference, current USACE DBA rates are based on four classes of employees:
• Service: $3.50 per $100.00 of payroll
• Construction & Mechanics: $4.25 per $100.00 of payroll
• Security: $10.00 per $100.00 of payroll
• Aviation: $17.00 per $100.00 of payroll
Now is the time to begin the search for a replacement DBA Insurance policy in order to secure the best possible rates. The LATITUDE DBA Insurance program is an excellent resource for contractors seeking DBA Insurance in the open market, and offers very competitive rates. Our team of experts has more than 25 years of experience and extensive knowledge of the DBA marketplace. Contact the LATITUDE DBA Insurance program today to explore your coverage options.