Buying A DBA Insurance Policy: What You Need To Know
As a business owner, you have some legal responsibility to protect your employees. This remains true if you send any employees overseas for work-related purposes. Specifically, if your business secures a work contract with the United States government, you'll probably be required to carry something called Defense Base Act (DBA) insurance for the workers who will be traveling.
Specifically, a DBA insurance policy is designed to protect your employees from health/medical costs if they are injured or become sick while traveling for work. Are you shopping for a DBA policy? There are some things you should know before you make a purchase.
What's Covered (And What's Not)
While exact coverage can vary from one DBA insurance broker to the next, there are some basic events/claims that are typically included under a DBA insurance policy. These usually include:
- permanent total disability coverage
- death benefits
- treatment by the worker's preferred physician overseas
Employers should keep in mind that DBA policies do have exclusions. For example, if an employee is determined to be a non-US resident, then benefits will often be reduced. Likewise, there may be limits on how much a total disability policy will pay out.
How Much It Will Cost You
The cost of DBA coverage will vary based on many factors, including the specific country or part of the world where your employees will be working. Areas with higher rates of violence or civil unrest, for example, will usually correspond with higher premiums. Some other factors that may affect how much a DBA insurance policy will cost your company may include:
- the number of employees who need coverage
- employee qualifications
- whether employees are working on or off a military base
What to Expect From the Claims Process
Hopefully, you will never need to file a DBA insurance claim. If you do, however, it's important to understand what to expect from the process. Generally, you will be expected to notify your DBA broker as soon as possible after a covered event. From there, you may also be required by your insurance carrier to complete and submit Form LS-202 (Employer's First Report of Injury) within 10 days of the incident date. By following these steps, you can avoid many of the common challenges that arise from DBA claims.
Shopping for DBA insurance coverage may seem overwhelming, but it doesn't have to be. With help from a DBA insurance broker, you can find a policy that will give your employees added protection and peace of mind.
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