What is the Defense Base Act?

Learn more about the Defense Base Act and how it affects your business.

While most American business owners know about the protections offered by workers compensation insurance, many are unfamiliar about the coverages offered by the Defense Base Act or DBA.  Curious to learn more about what the DBA is and which businesses this Act applies to?  Then read on to learn more about what the DBA entails.

What is the DBA?

The DBA was established in 1941 with the goal of protecting military workers on bases outside of the United States.  This Act was later amended to include government contractors working abroad on non-military projects such as building schools, dams, harbors, and other infrastructural elements.  Further changes extended coverage to enterprises centered around the security of the U.S. and its allies.  Today, most U.S. government contracts that require work outside the nation’s borders (even if they aren’t military in nature) require DBA coverage.

Who needs DBA coverage?

Not sure if you need DBA coverage?  Then here’s a list of those who require protection.

  1. Businesses and employees working on a military bases or reservations outside the U.S.
  2. Businesses and employees involved with public works outside the U.S. that are being funded by the U.S. government.
  3. Businesses and employees that are engaged in public works or military contracts with a foreign government that has been declared necessary to the national security of the U.S.
  4. Businesses and employees that provide services funded by the U.S. government, unrelated to military issues.
  5. Any sub-contractors that are involved with the previous four businesses.

What if I don’t have DBA coverage?

Unfortunately, there are consequences associated with failing to get the DBA coverage you need.  For instance, if you were contracted to work for the U.S. government but failed to get the proper DBA insurance, then you would face heavy fines and the possible loss of the contract.  More seriously, you might face a legal suit where common law defenses are waived.  This means that you might face a lawsuit in which you are prosecuted without the need for any evidence.  Finally, you could be taken to Federal Court, where you would face a costly and damaging case for any employees that were injured on the job.

Use this guide to help you determine whether your business needs Defense Base Act coverage.  If you have clients looking to get the right small business insurance for their company, then turn to the team at PMC Insurance Services.  Our insurance experts can assist you with a wide variety of coverage options available to your clients.  Contact us for more information.

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