FAQs

Defense Base Act, or DBA, insurance is a federally required workers’ compensation program for civilian employees working outside the United States under certain U.S. government contracts. It generally applies to work on U.S. military bases outside the United States, public works projects, and contracts tied to national defense.

Employers, contractors, and subcontractors performing this type of work are typically required to secure DBA coverage for their employees.

In limited situations, yes, but only through an approved waiver. Waivers are sometimes granted for local nationals. That said, a waiver does not always eliminate the need for DBA coverage. If there is no applicable local workers’ compensation law in the host country, the waiver may have little or no practical effect, and DBA insurance may still be required.

The safest approach is to review the contract carefully and confirm whether a valid waiver truly applies before assuming coverage is not needed.

Under the Act, “public work” is broader than many people realize. It includes fixed improvements and projects involving construction, alteration, repair, or removal for the public use of the United States or its allies.

It is not limited to construction. It can also include service contracts, operational support, and projects connected to national defense or war-related activities.

Yes. There is no minimum time threshold. Even short overseas trips can trigger DBA requirements.

Costs depend on payroll, job class, and country of operation. Rates are typically higher than domestic workers’ comp due to risk factors.

Only with Department of Labor approval. This is extremely rare and usually limited to large contractors.

You may face contract penalties, payment delays, or personal liability for employee injuries.

Yes. If the Defense Base Act applies to the work, the contractor is still responsible for securing the required insurance, regardless of what anyone else may have said.

That responsibility does not shift to the contracting officer, the agency, the Department of Labor, the insurance broker, or any state insurance mechanism. If coverage is required and not in place, the liability stays with the contractor.

Yes, in many cases you should. DBA insurance handles statutory workers’ compensation obligations, but it does not address every exposure that can arise from overseas work.

Depending on the operation, companies often also consider Business Travel Accident coverage, Kidnap and Ransom insurance, and Life insurance with war risk coverage. These are not required by the DBA, but they may be appropriate depending on where the work is being performed and the nature of the contract.

The Defense Base Act provides medical and disability benefits to covered employees who are injured in the course of employment. It also provides death benefits to eligible survivors if a covered employee dies as a result of a work-related injury or illness.

These benefits are statutory in nature and are intended to respond to injuries or deaths arising out of covered employment.

There are some limited exceptions. In general, the Defense Base Act does not apply to:

Employees covered by the Federal Employees’ Compensation Act

Workers engaged in agriculture, domestic service, or casual employment outside the usual course of the employer’s business

A master or member of a crew of a vessel

These exceptions are specific, so they should be reviewed carefully before concluding that DBA coverage is not required.

No. DBA coverage is not limited to U.S. citizens. It can apply to all paid employees working under a covered contract, regardless of nationality.

That includes U.S. citizens, U.S. residents, local nationals hired in the host country, and third-country nationals hired from another country to perform work under the contract. Employers should not assume nationality removes the DBA requirement.

Yes. Puerto Rico falls within the scope of the Defense Base Act. If the contract otherwise triggers DBA requirements, work performed there may still require coverage.

Generally, no. Work performed under a grant or cooperative agreement is typically not covered by the Defense Base Act.

That said, the underlying facts and contract structure still matter, so it is worth reviewing the agreement closely before ruling DBA in or out.

That depends on the contract. Whether DBA premium is reimbursable is determined by the specific terms, pricing structure, and reimbursement provisions of the agreement.

Some contracts allow for reimbursement of the premium, while others may treat it differently. The contract language should be reviewed carefully.

In practical terms, DBA insurance should be addressed as soon as an overseas U.S. government contract is awarded, and often sooner during the bid stage.

If civilian employees will be working outside the United States on a U.S. military base or under a U.S. government contract for public works or national defense, DBA insurance should be evaluated immediately.

Yes. In most cases, each subcontractor must secure its own DBA coverage for its own employees, unless it has been properly approved as self-insured.

A subcontractor generally cannot rely on another company’s DBA policy to cover workers on its own payroll. In addition, if a subcontractor fails to secure coverage, the upstream contractor can become liable for those benefits. That is one reason DBA compliance should be reviewed all the way down the contract chain.

No. Private insurance may supplement DBA coverage, but it cannot replace it when DBA is required.

If a contract falls under the Defense Base Act, the statutory coverage must be secured. Other policies, such as accident, life, or travel-related coverage, may help round out the program, but they are not a substitute for DBA insurance.