For civilians working under U.S. government contracts overseas, danger is not hypothetical. From war zones to remote reconstruction sites, the risks are real, and so are the consequences. However, active duty military personnel aren’t covered by this insurance.
For instance, the case of former Army Spc. Winston Hencely. Military.com notes that in 2016, he was injured by a suicide bomber who was unwittingly hired by a military contractor. Some people might get confused and believe Hencely could avail DBA insurance. However, Hencely was not employed by the contractor and hence isn’t covered.
So, in this article, we’ll walk through the core protections included in DBA insurance. Knowing these details will help in understanding what this insurance is useful for.
Medical and Disability Benefits
DBA insurance covers medical expenses and lost wages due to injury, much like workers’ compensation. But the key difference lies in the context. Medical care under DBA includes hospitalization, surgery, medication, and physical therapy, provided the treatment is considered reasonable and necessary.
Individuals with non-battle injuries (NBI) form a significant chunk of DBA insurance claims. While there’s little data on contract worker injuries, one meta-analysis found that for every 1,000 soldiers, almost 20 were expected to have an NBI.
The “reasonable” clause, however, can sometimes create gray areas, especially with long-term or recurring conditions. Contractors are often surprised to learn they need to follow an authorized medical provider list, and deviating from it can delay reimbursement.
Disability benefits are divided into temporary and permanent categories, each with its own pay structure. What many people miss is that even partial disabilities can qualify for compensation if they affect the ability to return to the same line of work.
There is also coverage for psychological trauma. Conditions like PTSD and anxiety are increasingly recognized under DBA, especially for those exposed to combat or violence. So, if a worker enquires about counseling, you can assure them that therapy will be covered.
Death Benefits and Protection for Families Left Behind
Death benefits under DBA insurance are one of the few formal safety nets available to families of overseas civilian contractors. When tragedy strikes, Defense Base Act insurance coverage can offer financial relief, but it also comes with conditions and administrative challenges.
The law provides weekly compensation to surviving spouses and dependents, calculated as a percentage of the deceased worker’s earnings. Funeral costs are also covered, but only up to a certain amount, which may seem modest when repatriation and international logistics are involved.
Sadly, this affects spouses and children a great deal, particularly when the contractor is in the defense field. The Armed Services YMCA records the rate at 24%, or 6x the rate of civilians. Moreover, 27% of service members reportedly had credit card debt over $10,000. (Many defense contractors tend to employ ex-military, and hence this data would apply to their families as well.)
When it comes to securing these benefits for your workers, one common problem is their failure to update dependency records. If a spouse or child isn’t listed, the claim process becomes significantly more difficult.
To make matters worse, some families end up getting scammed in this sensitive period as well. Data from the Federal Trade Commission shows that in 2024, military families lost $584 million in scams. The “Update Your File” scam was one of the many techniques responsible for these losses. Though these statistics focus on military families, you can be sure that these incidents are happening across the board.
Understanding Coverage Limitations
While DBA insurance offers broad protection, it does not cover every possible scenario. As Moody Insurance Worldwide explains, many insurance programs boast of global coverage for government contractors. However, when the details are examined, significant gaps exist. This is why it’s important to have a good insurance broker who can inform you of special risks and gaps.
Look at the “Zone of Special Danger” doctrine. This legal principle expands coverage to injuries or deaths that happen outside of specific job tasks, as long as the worker was living in a hazardous overseas environment. For example, if a contractor dies while swimming off-duty in a location known for political unrest or environmental danger, it may still be covered.
This doctrine recognizes that working in certain regions exposes a person to constant risk, regardless of the activity. However, not everything qualifies. Injuries from willful misconduct, illegal behavior, or intoxication are typically excluded.
Ultimately, DBA insurance can be a lifeline for countless people. It helps contract workers stay protected from the many risks that they face. If you’re a contractor who employs workers, understanding these core protections is fundamental to understanding the rights of your workers.
