The Defense Base Act (DBA) was passed in the USA in 1941. It called for an insurance program to provide workers’
compensation protection for the civilian employees working outside the United States on US military bases, or under a contract with the U.S. government for public works or for national defense. Defense Base Act insurance is intended to be a counterpart to domestic workers compensation coverage and, as such, is the sole recourse for workers who suffer “on-the-job” injuries or death while engaged in work in foreign locations under government prime contracts and subcontracts. It applies regardless of a written employment contract or length of employment, and to contracts administered by foreign governments.
Defense Base Act insurance provides coverage for injuries or deaths arising in the course of employment and is to be the sole, no-fault recourse for covered employees. DBA insurance does not apply to government employees because the Government self insures these risks under their own workers compensation program.
The law was then later expanded to cover all employees (US nationals, local nationals and third country nationals) of contractors (and sub-contractors) working on overseas contracts funded by any arm of the US government. This includes public works contracts with the government for the building of non-military projects such as dams, schools, harbors, power plants and roads abroad.
A further amendment added a vast array of enterprises revolving around the national security of the United States 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.
Benefits provided under the Defense Base Act are the same as those of the Longshoreman’s and Harbor Workers Act (USL&H). Whilst the benefits are the same, the majority of exposures due to the location and nature of the contracts are very different from USL&H exposures. The cost for DBA insurance— if allocable and reasonable—is a reimbursable cost under government contracts.