Workers’ compensation insurance for their employees working overseas is required by federal law for all US government contractors and subcontractors. The Defense Base Act, 42 U.S.C. 1651-54, and the Longshore and Harbor Workers’ Compensation Act, 33 U.S.C. 901-50, are two connected acts. Parts 701, 702, 703, and 704 of the Code of Federal Regulations contain implementing regulations. Workers’ compensation insurance is also required for all foreign contracts under 48 C.F.R. 28.305 and 52-228-3 and 52-228-4 of the Federal Acquisition Regulation (FAR).
The Defense Base Act is administered by the United States Department of Labor’s Office of Workers’ Compensation Programs (OWCP), Division of Longshore and Harbor Workers’ Compensation, which ensures that workers’ compensation benefits are paid to covered personnel promptly and appropriately.
What is a DBA insurance?
DBA insurance, or Defense Base Act insurance, was created to provide US Government contractors with an insurance solution to safeguard their employees and subcontractors when working outside of the United States.
In other words, you would be held liable if you sent an employee overseas to give translation services on the ground and they were harmed, whether significantly or not. Medical fees, as well as the cost of evacuation or any other critical demands, would be included. Unless you have Defense Base Act insurance, that is.
Is DBA insurance an allowable cost?
For most employees working overseas, DBA mandates U.S. government contractors to have workers’ compensation insurance. If allowed by federal laws, the cost of this insurance is usually reimbursable under government contracts.
How do you calculate DBA insurance?
To calculate, multiply each worker’s daily wage by the number of working days, and the result is the payroll. For example, you have five people working for you on a 15-day contract in another country for $500 per day. On the application, you would indicate a total salary of $37,500.
What is a DBA waiver?
The DBA is a federal workers’ compensation statute that falls under the Longshore and Harbor Workers’ Compensation Act, as you probably already know (Longshore Act). The Defense Installation Act (DBA) gives workers’ compensation coverage to employees who work outside of the continental United States, often as non-military employees on an overseas military base.
What is the difference between a DBA and LLC?
Entrepreneurs frequently wonder if they should form a DBA or an LLC when beginning a firm. A limited liability company (LLC) is a type of corporate entity that protects its owners from personal liability.
A DBA (doing business as) name is merely a company’s registered name. Sole proprietorships, partnerships, limited liability companies, and corporations can all use DBAs.
We’ll discuss why forming an LLC is the best option for most business owners in our DBA vs. LLC tutorial below.
If you’re ready to start incorporating your limited liability company right away, we propose using our reputable professional service:
What is DBA usaid?
All agency staff and partners involved in the Acquisition and Assistance process receive information from AAPDs. Advance communication of changes in acquisition or assistance regulations, reminders, processes, and general information are all examples of information. AAPDs can also be used to quickly introduce new requirements while waiting for official amendments to acquisition or assistance regulations.
Unless otherwise specified in the guidelines below, AAPDs are EFFECTIVE AS OF THE DATE OF ISSUANCE; the directives continue in effect until this office publishes a notice of cancellation.
The DBA contract was recently modified, extending the duration of performance by six months from May 31, 2021 to a revised end date of November 30, 2021.
All other details stay the same, including Option 3 tariffs, which will continue to apply until the amended end date.
Required Action: In all new solicitations and awards, Contracting Officers (COs) must continue to use the DBA rates and contact information in this AAPD.
BACKGROUND: DBA coverage is worker’s compensation insurance that allows employees to be compensated if they are injured while working on a government-funded contract that is conducted outside of the United States. In the event that an employee is killed as a direct result of his or her employment under a government-funded contract, DBA coverage offers compensation to the person’s dependents. DBA coverage is required by law for employees of contractors and subcontractors, whatever of the length of their assignment (see 42 U.S.C. 1651 et seq.). It is in addition to any coverage provided by the Department of State. Subcontracts supported by the United States Agency for International Development (USAID) are also covered. Before their personnel travel in country and begin work on the contract, USAID contractors and subcontractors must have DBA coverage. Contractors and subcontractors must keep their insurance coverage in place until the contract’s insured personnel have completed their overseas work.
What is a subcontractor DBA?
You realize that the injured worker was meant to be covered by your sub’s DBA insurance. It’s written in plain and white in your contract, which the agency’s Contracting Officer approved. The subcontractor dutifully gave you with a certificate of insurancebut not the insuring agreementat the contract’s beginning 14 months ago, according to your insurance archive. The paperwork finishes there, and your problems begin. The First Lesson: Whenever possible, request a copy of the sub’s insurance policy, noting the expiration dates and ensuring that the coverage offered is as advertised.
Congress established far-reaching worker protections in the Defense Base Act to encourage the hiring of overseas civilian workers assisting on government contracts, national defense service contracts, and US-funded public works and service projects (think the USO). Unless the Secretary of Labor grants a waiver, the safeguards apply to both US citizens and foreign nationals. The DBA protects workers who are injured or killed while on the job, even if it is not within regular working hours. Even recreational activities of employees are sometimes compensable under the DBA when they are assigned to unsafe places.
The DBA designates the prime contractor as the subcontractor’s “deemed employer.” This DBA protection is a cruel trap for the unwary, as it allows an uninsured or underinsured subcontractor’s employee to become the prime contractor’s statutory employee. Finally, the DBA moves the duty of loss for benefits to the “employer” and requires the employer (that is, the prime contractor) to insure such benefits. This type of insurance is widely available on the market from a select group of insurers. In fact, the subcontractor purchased and paid for it fourteen months ago, but failed to renew it, and it expired a month before the fall.
To make matters worse, the prime contractor’s president, treasurer, and secretary are now (1) jointly liable to their involuntary employee for the benefits when there is no insurance in place; and (2) jointly liable to their involuntary employee for the benefits when there is no insurance in place. The upcoming tort action is a lawyer’s dream because the deemed employer waives all tort law defenses, including scope of employment, workers’ compensation bar, assumption of risk/contributory negligence, and borrowed servant, by statute. Essentially, the prime contractor (and the sub) are practically strictly accountable for all proved losses suffered by the plaintiff under this regime. The employee is given the option of statutory damages that are capped or lucrative common law tort remedies.
Yes. If your company is solvent and capable of paying a judgment and contesting the claim, it may have rights against its subcontractor. However, if you do not pay injured worker compensation while that situation is being resolved, the government will come knocking, demanding confirmation of your DBA insurance. Your receivables may be withheld by the government, and your primary contract may be terminated.
If you were fortunate enough to obtain the appropriate prime contractor insurance, you may find that this nightmarish subcontractor scenario is covered. Regardless of the subcontractor’s concerns, you should tender the claim to your own DBA insurance provider as soon as possible. The insurance company will either hire defense counsel, clearing you, or send your company an LS-207 “Notice of Controversion,” alleging there is no coverage since the subcontractor was uninsured.
Other elements of your prime contractor insurance policy may provide coverage for the DBA-deemed employee. For example, the insurer may have agreed to the following language in a conventional workers’ compensation insuring agreement with a broad DBA endorsement: “We shall pay promptly when due the benefits required of you by the workers’ compensation law.” The carrier may step in and cover your organization for this unanticipated exposure if notification is given.
The DBA insurance elements are sometimes added to a broad(er) workers’ compensation insurance policy via endorsement. Additional insured endorsements are one of the many DBA coverages accessible to prime contractors. These endorsements can, of course, be underwritten as “blanket” insurance for all subcontractors working on the main contract for an additional cost. A schedule of subcontractors may be published as changed from time to time, usually quarterly, indicating the contracts expressly and the responsibilities to which subs are assigned, as an alternative. In any case, you’ll need to be hypervigilant about monitoring and requesting updates on your subcontractor’s insurance, including requiring electronic notices of cancellation or non-renewal and creating your own tickler based on a review of the subcontractor’s insurance policy’s inception and expiration dates.
If neither of these options is available, prime contractors may consider adding wide “insured contract” endorsements to their DBA insurance. Coverage may drop down under an insured contract endorsement to fill in some gaps, such as the dreadful subcontractor situation described above. A prime contractor, for example, can obtain insured contract coverage for “responsibility arising out of the Named Insured’s contract(s) that need coverage under the Defense Base Act, 42 U.S.C. 1651-1654.” It’s worth noting that practically all coverage limitations and conditions that apply to a direct insurance claim by the insured also apply to contractual liability insurance. When a claim arises, prompt notice, incident reports, and good communication are critical.
Depending on the language of the indemnity agreement, the prime contractor’s insurance may pick up the liability as an insured contract if an indemnity agreement was in place prior to the injury. The link between an indemnity agreement and the scope of supplementary insured coverage is frequently a source of contention in courts. However, well-considered insurance instruments signed before to a disaster can include policy wording extending (or occasionally limiting) extra insured status provided the named insured has taken the additional insured’s liability in a documented “insured contract.”
The best way to protect your assets is to contact and communicate with credible coverage counsel on a regular basis, properly outlining your business strategy and objectives and needs. Expert coverage counsel can work with you and your broker to resolve a rejection or help you evaluate or test your DBA program. Professionals are available to check for gaps, prepare for the unexpected, review the usefulness of your coverage, and lobby your insurance provider for enhancements and reduced exclusions at, or even before, renewal. It’s possible that after the claim is submitted, it’ll be too late!
Because of the DBA’s sharp, unforgiving “tooth,” prime contractors should assess their DBA and workers’ compensation coverage ahead of time, and develop an insurance procurement and monitoring SOP to ensure they don’t plummet… down, down, down the ladder.
Is DBA insurance required for Germany?
Yes, foreign nationals must be insured under the Defense Base Act. If you are operating in a waiver country and have access to the local state plan for workers compensation, this is an exception. DBA benefits are available to people of any nationality.
What does the Defense Base Act require?
Welcome to the Defense Base Act (DBA) page for the Division of Longshore and Harbor Workers’ Compensation (DLHWC). The Defense Base Act ensures that civilian personnel working on U.S. military bases or under a contract with the US government for public works or national defense are covered by workers’ compensation. This website offers general information about the Defense Base Act that may be useful to federal contracting authorities, US government contractors, insurance specialists, covered employees and their families, and others involved in workers’ compensation claims.
What is the DBA rate?
8. What factors go into determining the compensation rate?
Benefits are calculated as two-thirds of an employee’s average weekly salary (AWW), up to a weekly maximum rate.
- Visit our website’s National Average Weekly Wages (NAWW) section for more information on maximum compensation rates.
The AWW should be representative of the employee’s annual earning capacity. The employment contract, W-2 tax forms, salary paperwork, and Social Security records are all documents that could be used to determine the AWW. Allowances used to calculate wages in other countries typically include foreign housing, cost of living adjustments, completion awards/bonus, vacation or holiday pay, overtime, and per diem, as long as they are not duplicative of other allowances.