If you've never taken out a DBA insurance policy before, you might not understand exactly what this type of insurance coverage entails. The following are six things you should know if you're in need of DBA insurance.
DBA insurance stands for Defense Base Act insurance
In terms of insurance coverage, DBA stands for the Defense Base Act. The Defense Base Act was passed in 1941 and relates to insurance coverage benefits for workers employed overseas for US defense agencies.
The Defense Base Act is an extension of workers' compensation coverage requirements and is regulated by the Department of Labor.
DBA insurance is required by law for contractors working with certain US government agencies overseas
It's important for contractors with certain US government agencies to understand that DBA insurance is required by law in certain cases. DBA insurance is a requirement for defense contractors working in areas outside of the United States. Contractors need to meet the requirements set forth by the Defense Base Act to make sure that they are meeting their responsibilities toward their employees.
The costs of DBA insurance premiums are impacted by numerous factors
It's important for contractors needing to meet DBA requirements to understand the costs of premiums. DBA insurance costs can be significant and are impacted by numerous factors.
Some factors impacting DBA insurance costs include the geographic region in which the contractor is operating, the qualifications of a contractor's employees, and the total overseas payroll of the contractor.
There are similarities between DBA insurance and workers' compensation insurance
The primary function of DBA insurance is to serve as workers' compensation coverage for defense contractors overseas. This means that DBA insurance will compensate employees who are injured on the job while working on US defense contracts overseas.
DBA insurance won't cover your employees when they're in the US
If you have employees working both overseas and domestically, it's important to note that DBA insurance won't cover any incidents that occur on US soil. You will need to have a separate workers' compensation policy if you have employees working within the United States.
There are penalties that you could face for not carrying DBA insurance
Consequences for not meeting DBA insurance coverage requirements can be severe. Employers can face penalties including fines and imprisonment for not meeting requirements.
Contractors also may be forced to pay an employee's DBA benefits out of pocket in the event of an employee injury where DBA insurance coverage has not been acquired beforehand.
For more information, contact a DBA insurance broker.