Established in 1941, the primary goal of the 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 U.S. 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.
The Defense Base Act covers the following employment activities:
If any one of the above criteria is met, all employees engaged in such employment, regardless of nationality, are covered under the Act.
Failure to obtain DBA insurance may carry stiff penalties. Government contracts generally contain a provision requiring bidding contractors to obtain necessary insurance. Failure to do so may result in fines and possible loss of contract. Employers without DBA coverage may be subject to suits under common law wherein common law defenses are waived. In other words, the claimants or their heirs sometimes need only file suit and may not have to prove negligence. Claims may be able to be brought in Federal Court against the insured directly.
Disclaimer: This information is condensed. Please refer to the actual Defense Base Act for the complete text. This document is not intended to and does not purport to provide legal advice. You should consult your own lawyer for advice regarding and for an explanation of which laws may or may not apply to you, your business, or your personnel.
Courtesy of AIG Worldrisk