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What is 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. 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 Defense Base Act coverage.
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Who Requires DBA Coverage?
||Any employee working on a military base or reservation outside the U.S.
||Any employee engaged in U.S. government funded public works business outside the U.S.
||Any employee engaged in a public works or military contract with a foreign government
which has been deemed necessary to U.S. National Security.
||Those employees that provide services funded by the U.S. government outside the realm
of regular military issue or channels.
||Any employees of any sub-contractors of the prime or letting contractor involved in a
contract like numbers 1-4 above.
What are the consequences of not carrying DBA Coverage?
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 suits under common law,
wherein common law defenses are waived. In other 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. According
to Ashcraft & Gerel, LLP, the leading national law firm handling Defense Base Act cases for injured workers, these
cases can be very costly, and should be a source of great concern for contractors operating overseas.
Some Information Courtesy of AIG WorldRisk