Four Things You Should Know About DBA Insurance For Your OCONUS Contract
If you are a business that has worked on government contracts for many years, you may have been surprised that you are required to have DBA insurance after being awarded your first outside the continental United States contract. This may not be something you were aware of before, but since this is your first OCONUS government, you need to carry a policy that covers your employees overseas. There are a few things you need to know.
This type of insurance is workers' compensation for your employees
DBA stands for Defense Base Act and is a type of workers' compensation insurance to cover your employees working overseas in case they are injured. The policy will cover time off from work, as well as medical expenses. It will also cover compensation to a named beneficiary in the unfortunate situation that results in death. Previous to this act, there were no mandatory requirements, so workers often had no coverage or insufficient coverage.
Your company's present workers' compensation insurance does not apply
Since they are over sears, working on government property, or working on a government contract, your current workers' compensation policy will not apply. Without DBA insurance, your workers are not protected. In addition to your workers, this policy will cover local workers, in case you need to hire them for the job. When these people are hired, they will be covered under the same policy as your U.S. nationals.
A subcontractor is required to have a DBA policy
If you are a subcontractor that is working for a prime contractor overseas, you will still need to have a DBA insurance policy. The prime contractor that you are working for will be required to have a DBA policy, but it will not cover any subcontractors. If you are a subcontractor, you will be required by law to purchase insurance.
The cost of DBA insurance may be high
There are several factors that will determine your premiums. The country you will be operating in, the number of employees covered, the type of work being done are three of the most important factors. The formula used to calculate this insurance is similar to workers' compensation, but because the work is being done overseas, the host country will be a large factor in your premiums. However, you need to be aware that this policy must be paid in full upfront. This can hurt your cash flow.
You should be in a celebratory mood after winning your first OCONUS contract, but you need to understand that you will be required to carry a DBA insurance policy. This coverage is for your employees working overseas, but your current workers' compensation does not apply. If you are a subcontractor, the prime contractor's policy will not apply to your company. Keep in mind, the premiums will likely be higher, and the entire policy needs to be paid for upfront.
To learn more, contact a company like Risk Reconnaissance.