Becoming an Adult

Defense Base Act Insurance: The Ins And Outs

19 November 2021

Robin King

So, you've just won a contract with the United States Department of Defense? Congratulations! But do you have everything you need to start working on your project legally? The US government, especially the Department of Defense, has numerous requirements for contractors and employees who wish to work with them outside the country. One of these is the defense base act insurance.  This piece delves more into this type of insurance to help you decide if it's necessary for your scenario.

What is Defense Base Act Insurance?

US government contractors use the defense base act (DBA) insurance to protect their subcontractors and workers against injuries incurred while working overseas. That means, if, for instance, you are working with a professional translator outside the United States borders and they get injured in the line of duty, DBA insurance takes full liability. This insurance mainly provides disability and medical coverage, making it somewhat similar to worker's compensation.

Who Need Defense Base Act Insurance?

The DBA policy covers workers employed by private entities to work on US military bases or any other locations used by the United States government for military purposes. For instance, any businessperson running a restaurant in a military base overseas is required by law to cover their chefs and waiters. That also applies to private employers working in other United States possessions and territories. You also need to be covered by defense base act insurance when working with any United States government agency responsible for a public work contract. That can be a contract that includes repairing, renovation, improvement, or entire construction of infrastructures like roads, highways, or other public structures. DBA insurance is mandatory if the public works contractor's activities relate to war activities or national defense outside the US borders.

Moreover, you aren't allowed by law to work on US government-approved and funded projects under the Foreign Assistance Act without DBA insurance. Such contracts may include selling military services, equipment, and other materials between the United States government and its allies. The rule of thumb here is, if these transactions take place outside the US, the defense base act should be in full effect. In addition, DBA insurance covers you when working for any US organization providing services like welfare for the Armed Services outside the US borders. Employment in such entities usually involves serving US military personnel and their families throughout their time in active service.

Find a Suitable Defense Base Act Insurance Broker

If you need defense base act insurance, seek a reputable broker. The right DBA insurance broker must have values that match those of your company. Plus, their main priority should be protecting your company's interests and objectives in the most cost-efficient manner. Since your business has unique needs, work with a broker that can help you pick a customized plan. 

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