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5 Things to Know about Defense Base Act (DBA) Insurance

December 1, 2022

U.S. government contractors are held to high standards when working with the government and protecting their workers at government facilities. However, there are other laws for those companies that work on projects beyond U.S. borders. While there are other legal requirements for US government contractors working abroad, this article focuses on the Defense Base Act (DBA) Insurance.



What You Will Learn

Insurance Coverage under the DBA

The Defense Base Act applies to all persons employed on U.S. military bases or any lands used for military purposes outside the United States, including those located within the United States territories and possessions. The act includes contractors working on projects funded by the United States, even if the project is in another country. The act applies to all workers who provide welfare or similar services to armed forces members, whether paid directly by their employer or another contractor.

DBA Insurance Requirements for U.S. Government Contractors

Most of the Longshore and Harbor Workers' Compensation Act (LHWCA) requirements are built into the Defense Base Act. The DBA, like the LHWCA, has stringent insurance requirements. The Defense Base Act (DBA) includes the Longshore and Harbor Workers' Compensation Act.

The LHWCA says every employer must get insurance or be allowed to self-insure to pay for workers' compensation benefits. 


Also, Section 32(a) of the LHWCA says that every employer must either have insurance against having to pay workers' compensation or be allowed to do it themselves. Also, the Office of Workers' Compensation Programs (OWCP) runs the program. This means that insurance companies and employers who pay for their insurance can take part.

Waivers for the Defense Base Act

The Defense Base Act (DBA) protects U.S. government contractors from state worker’s compensation laws. The act applies to foreign and U.S. companies, no matter where the contractor is located in the 50 states. In addition, it protects employers from liability under the Federal Tort Claims Act (FTCA).


To receive DBA waivers, the employer must file Form 95 with the Department of Labor (DOL). If the contracting officer approves the waiver, they sign the form and send it to the DOL. The Department forwards the form to the Office of Workers Compensation Programs (OWCP).

If the contracting officer denies the waiver, the contractor can appeal the decision to the Assistant Secretary for Employment Standards. If the Assistant Secretary grants the waiver, she issues a certificate stating the waiver is effective. Then, they would forward the certificate to the contracting officer.


Once the waiver is approved, the contractor must notify each affected employee of the change in status. Employees covered by the waiver must sign a release waiving their rights to pursue claims against their employer under state law. Filing the release with the Department is a requirement.

Benefits of the Defense Base Act

The Defense Base Act provides disability benefits to covered employees injured during employment, whether or not the injury occurs during working hours. Benefits include payments for temporary total disability, permanent total disability, and death.


Total disability pay is currently two-thirds of the employee's average monthly wage, up to a maximum of $1,856 per month. For partial loss of earnings, there is a 50% benefit based on the difference between the employee's pre-injury wages and their post-injury wages. The amount covers the period of disability. 


Death benefits are half of the deceased worker's average monthly wage plus 2/3 of the average monthly salary of the deceased's dependents up to the current limit of $2,904 per month. If the decedent had been married, the survivor would have received twice the amount of the deceased's average monthly wage.


There is no minimum compensation rate; however, compensation rates are adjusted annually for inflation.

DBA Standard Reporting Procedures for Injuries and Filing Claims

The employer would cover their medical bills if the employee suffered an injury on the job. If an employer fails to fund emergency care or hospitalization expenses, the Secretary will. Employers must report any on-the-job injuries or fatalities to the director within ten days of discovering or having grounds to discover the injury or death. This report must include information about your injuries, how they occurred, and how much compensation you are awarded under the Act.


If an injury occurs on the job, the other firm must notify the worker's direct supervisor and the director as soon as feasible. If this rule is not followed, the company will receive punishment from the U.S. government.


Within 30 days of the accident that caused the injury, a person who wants to get benefits under the Act must send a written application to the district director in charge of his place of work. With help from the Social Security Administration, it is easier to find the applicant's current mailing address. Then, they can receive a copy of the application at the given address. The claimant must show the district director paperwork that shows he did not know about the accident before.


When the district director gets the application and proof, he or she will look into whether or not the claimant is eligible for benefits under the Act. If the district director decides that the claimant is qualified, he must give benefits by issuing a Compensation Order. He must transmit a copy of the compensation order to the claimant.


Within 30 days of receiving a compensation order, anyone who disagrees with a district director's decision can file an appeal. The deputy commissioner will hear additional evidence at the request of any party. Following the hearing, the deputy commissioner must uphold, reverse, modify, or remand the decision. Anyone who disagrees with the final decision made by the deputy commissioner can ask the Commission to rehear the case.


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