DBA Insurance - Defense Base Act Insurance is required on federal contracts for employees working outside the United States. Please note that DBA insurance is a requirement for all federal contracts with international activity. In the event you have a cooperative agreement or grant, funded by the federal government, please refer to the solicitation for DBA compliance requirements.
The primary goal of the Defense Base Act (DBA) was to cover military workers outside the United States; however, today the Defense Base Act insurance is typically required for almost any contract with an agency of the U.S. Government, for work outside the U.S., whether military in nature or not. DBA Insurance provides life and disability insurance in the event that civilian contractors are injured, killed, or kidnapped in the course of their work for US Government Agencies such as the various branches of the Department of Defense, United States Agency for International Development (USAID) or the State Department.
Failure to obtain DBA insurance carries stiff penalties, and it may result in fines from the USG and possible loss or termination of contract.
If the contract is funded by USAID, DBA insurance must be obtained by Allied World National Assurance Company as there is a sole source agreement between USAID and Allied World. Contact information for Allied World is found at the following web address: http://www.alliedworldinsurance.com/usa-casualty-usaid.
For budgeting purposes, when calculating the DBA coverage insurance cost, it is recommended to budget 2% of the total salaries and wages, unless advised otherwise by the sponsoring agency.