Defense Base Act
Insurance Coverage
The Defense Base Act (DBA) provides compensation for disability, medical
and death to workers injured or killed in the course of their employment.
It is more important than ever, especially in today’s present
economic and political environment that companies are familiar with
the Defense Base Act and its insurance coverage requirements. Department
of Defense and other government contracts are being awarded to contracting
companies for overseas jobs, such as in Afghanistan and Iraq. As more
and more U.S. companies enter into relationships with the U.S. government
for a variety of projects involving the military for public works,
such as the rebuilding of war-torn countries and for the overall national
security of the country, DBA insurance coverage is vital -- and mandatory. Today,
almost any contract with an agency of the U.S. government, for work
outside the U.S., whether military in nature or not, will likely require
DBA insurance coverage.
The Defense Base Act
Established in 1941, the primary goal of the Defense Base Act was
to cover workers on military bases outside the United States. The
act was amended to include public works contracts with the government
for the building of non-military projects such as dams, schools, harbors,
and roads abroad. A further amendment added a vast array of enterprises
revolving around the national security of the United States and its
allies. Under the DBA, injured workers are eligible to receive weekly
benefits for time lost from work or lost pay. Further, if the injuries
are to the extremities resulting in a permanent impairment, they can
be entitled to receive permanent disability benefits.
Responsible
Party
The prime or letting contractor is responsible for claims under the
Defense Base Act for any employees in the situations listed above.
While sub-contractors of the prime contractor also require Defense
Base Act Insurance, if they do not secure the required coverage, the
prime contractor is responsible for the payment of benefits.
Failure to obtain DBA Insurance
Failure to obtain DBA insurance carries stiff penalties. All government
contracts contain a provision that requires bidding contractors to
obtain necessary insurance. Failure to do so will result in fines
and possible loss of contract. The additional and most severe penalty
is that employers without DBA coverage are subject to being sued.
An employer can be stripped of most common law defenses, such as employee
negligence or that the employee assumed the risk of his employment.
This leaves the employer at risk for being responsible for damages
to employees on its job site overseas. Companies involved in these
types of cases will find them very costly, and ensuring proper DBA
coverage should be a source of great concern for contractors operating
overseas.
Click here
for a copy of the Defense Base Act
Triggers
for DBA
There are five provisions in the current version of the Defense Base
Act that prompt coverage:
1. Any employee working on a military base or reservation outside
the U.S.
2. Any employee engaged in U.S. government funded public works business
outside the U.S.
3. Any employee engaged in public works or military contract with
a foreign government which has been deemed necessary to U.S. national
Security
4. Those employees that provide services funded by the U.S. government
outside the realm of regular military issue or channels
5. Any employee of any subcontractors of the prime or letting contractor
involved in a contract like number 1 - 4 above
Waivers
One should note that DBA coverage makes no reference to the nationality
of covered employees; thus, local nationals or third country nationals
are automatically covered under the DBA. Waivers can be granted, but
they need to follow certain criteria, and only the Secretary of Labor
is able to authorize any such waiver.
Key points for gaining waivers include:
Class of employee must have available alternate means of compensation
such as Employers Liability, Workers' Compensation, or Social Security
- Waivers can not be requested for any class of employee including
U.S. citizens or those employees hired inside the U.S.
· Agency letting the contract must recommend that
such a waiver be granted
· Contractor must file an application with the U.S. Department
of Labor Coverage Issues
Below are some key points to keep in mind regarding
coverage situations.
The courts rely on precedent when determining liability issues. Two
doctrines known as the Zone of Special Danger and Reasonable Recreation
are central to finding coverage under the Act.
The Zone of Special Danger doctrine requires that an employee's injury
or death occurs arising out of or in the course of employment. In
addition, the Zone of Danger states that where there exists unique
conditions or circumstances of employment which place an employee
in a zone of danger, then an accident resulting in injury or death
need not be strictly related to job duties.
The Reasonable Recreation doctrine requires that an employee's injury
or death occur arising out of or in the course of the employer's furnished,
funded or promoted recreational activities, some non-sponsored activities
may also be included. Please note that these two doctrines taken together
do not lead to "24 Hour Coverage" for an employee.Click
here to request more information on Defense Base Act DBA Insurance.
For a no-charge and no-obligation personal quote, email us at info@nyig.com |
