Defense Base Act Insurance

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International Travel Insurance

Black Fox International
Special Risk Insurance Brokers
1.800.877.2445 /  610.461.6690  / Fax 610.586.5467
info@black-fox.com

Does your company need Defense Base Act Insurance?

Overview of Defense Base Act / DBA Insurance Coverage
The Defense Base Act provides disability, medical, and death benefits to covered employees injured or killed in the course of employment, whether or not the injury or death occurred during work hours.  Compensation for total disability is two-thirds of the employee’s average weekly earnings, up to a current maximum of $1,030.78 per week. Compensation also is payable for partial loss of earnings.  Death benefits are half of the employee’s average weekly earnings to the surviving spouse or to one child, and two-thirds of earnings for two or more such survivors, up to the current maximum weekly rate. Permanent total disability and death benefits may be payable for life, and are subject to annual cost of living adjustments.  There is no minimum compensation rate. 
The injured employee is entitled to medical treatment by a physician of his/her choice, as the injury may require.  Medical benefits may not be commuted.

Background:
Established in 1941, the primary goal of the 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 U.S. and its allies. Today, almost any contract with an agency of the U.S. government, for work outside the U.S., weather military in nature or not, will likely require Defense Base Act coverage.

In the current version of the Defense Base Act, there are five provisions 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 the 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 employees of any sub-contractors of the prime of letting contractor involved in a contract like numbers 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.

Coverage Issues
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 te course of employment.  In addition, the Zone of Danger states that where there exist 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.

Failure to obtain DBA insurance carries stiff penalties.  All government contracts contain a provision that requires bidding contractors obtain necessary insurance.  Failure to do so will result in fines and possible loss of contract.  The additional and the most severe penalty is that the employers without DBA coverage are subject to suits under common law wherein common law defenses are waived. In others words, the claimants or their heirs need only file suit and do not have to prove negligence.  Lastly, all claims may be brought in Federal Court and are against the insured directly.

At Black Fox International, we want to be sure that our clients get the Defense Base Act coverage they must have and we also want to make sure that we fill any and all gaps that could cause our clients unexpected losses. Travel Accident, War Risk and assistance services to employees are just a few of the areas to cover; Let us put our experience to work for you.  

Black Fox International, Inc.
P.O. Box 1187
Sharon Hill, PA  19079
800-877-2445 / 610-461-6690 / Fax 610-586-5467
info@black-fox.com
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