U.S. Federal law requires all U.S. government contractors and subcontractors to secure workers’ compensation insurance for their employees working overseas, including in Afghanistan, Iraq, Syria, Kuwait. The United States Department of Labor, Office of Workers’ Compensation Programs, Division of Longshore and Harbor Workers’ Compensation administers the Defense Base Act (DBA). It is tasked with ensuring that injured workers’ compensation and medical benefits are provided by the employers quickly.
DBA covers the following employment-related activities:
- Working for private employers on U.S. military bases or on any lands used by the United States for military purposes outside of the United States.
- Working on public work contracts with any U.S. government agency, including construction and service contracts in connection with national defense or with war activities outside the United States.
- Working on contracts approved and funded by the U.S. under the Foreign Assistance Act, generally providing for cash sale of military equipment, materials, and services to its allies, if the contract is performed outside of the United States.
- Working for American employers providing welfare or similar services outside of the United States for the benefit of the Armed Forces, e.g. the USO.
No matter the nationality of the injured worker, if any one of these criteria is met, those employees are covered under the Act. For workers injured in zones of special hostility, such as Iraq, Afghanistan and Syria, coverage is 24 hours.
Sections 1(a)(4) and (5) of the Defense Base Act, provide that every contract coming within the purview of the Defense Base Act:
“shall contain provisions requiring that the contractor (and subcontractor or subordinate contractor with respect to such contract) (1) shall, before commencing performance of such contract, provide for securing to or on behalf of employees engaged in such Public work under such contract the payment of compensation and other benefits under the provisions of this Act, and (2) shall maintain in full force and effect during the term of such contract, subcontract, or subordinate contract, or while employees are engaged in work performed thereunder, the said security for the payment of such compensation and benefits,”
The Defense Base Act (DBA) adopts the provisions of the Longshore and Harbor Workers’ Compensation Act (LHWCA), which is a U.S. Maritime Law, with only a couple exceptions. The insurance obligations for the Defense Base Act are the same as those found in the Longshore Act.
Section 32(a) of the Longshore Act requires every employer either to secure insurance for the payment of workers’ compensation benefits provided under the Act or to be permissibly self-insured. The Office of Workers’ Compensation is responsible for the approval of insurance carriers and self-insurance of employers.
Three major insurance carriers are currently providing Defense Base Act insurance coverage, include AIG (Insurance Company of the State of Pennsylvania), Allied World and Starr Indemnity. Gallagher Bassett and Broadspire typically handle the claims for Allied World and Starr Indemnity. AIG has its own adjusters and claims representatives.
Section 4(a) of the Defense Base Act mandates that every employer to be liable for, and to secure the payment of, disability, medical, and death benefits to its employees in the event of injury or death. If a subcontractor fails to secure the payment of compensation, the contractor will be liable for and be required to secure the payment of such benefits.
Section 5(a) of the DBA provides that “a contractor shall be deemed the employer of a subcontractor’s employees if the subcontractor fails to secure the payment of compensation.”
Section 5(a) also provides that if an employer fails to secure payment of compensation as required by the DBA, an injured worker may elect to sue the employer for tort damages on account of such injury or death. In such action the defendant may not plead as a defense that the injury was caused by the negligence of a fellow servant, or that the employee assumed the risk of his employment, or that the injury was due to the contributory negligence of the employee.
Section 38(a) of the Defense Base Act provides that an employer who does not secure the payment of compensation shall be guilty of a misdemeanor and, upon conviction thereof, shall be punished by a fine of not more than $10,000 or by imprisonment for not more than one year, or both. And if the employer is a corporation, the president, secretary, and treasurer shall be also severally liable for such fine and imprisonment.
Furthermore, if a corporation does not secure the payment of compensation, the president, secretary, and treasurer shall be severally and personally liable, jointly with the corporation, for any compensation or other benefits payable under the Act in respect to any injury or death which may occur to any of its employees.
If you have been injured overseas working under a U.S. Government contract, it is important to speak with a DBA Lawyer soon after your injury. Our DBA lawyers do not charge a fee for a consultation. In fact, our fees are paid for by DBA insurance companies upon a settlement or if our DBA attorneys litigate a case and receive a favorable outcome. No DBA lawyer is allowed to take a percentage of any worker’s settlement.