You may be focusing on how to become a government contractor. However, you should be aware of the Defense Base Act (DBA). Is it the first time you hear about this law?
If so, you should get a full grasp of this regulation before closing on your government contract. Don’t know what we’re talking about?
We’ve got you covered. We’ll tell you everything you need to know about the DBA and how to comply with it. Read on for your guide to get your business ready for government contracting today!
How to Comply with the DBA
When you choose to take a government contract, you may focus on how to obtain the right equipment and talent for the job. However, you must also consider how to comply with the DBA. This law requires all government contractors and subcontractors to protect their employees by providing workers’ compensation coverage.
You may think your current insurance meets these requirements. As a contractor under the DBA, you’ll need to obtain workers’ compensation insurance to protect your employees located overseas. This regulation also requires you to meet most of the insurance guidelines from the Longshore and Harbor Workers’ Compensation Act.
While the law states you can be self-insured, your company will need to obtain approval from the Office of Workers’ Compensation Programs to comply with the DBA. According to this regulation, your insurance must cover the payment of workers’ compensation benefits. You should consider getting insured by one of their approved insurers to ensure compliance.
What Are the Consequences of Not Complying with the DBA?
The DBA also makes contractors liable for disability, medical and death benefits in case of injury or death of an employee. Your company will also be on the hook if an employee of an uninsured subcontractor suffers an injury or death while working overseas.
You may think obtaining this insurance coverage is too expensive. Yet, not meeting these guidelines can cost you more. Not securing the payment of workers’ compensation exposes your company to tort damages for the injury or death of an employee.
The law establishes that any employer who doesn’t secure the payment of these benefits is guilty of a misdemeanor. They’ll be imprisoned for no more than 1 year, receive a fine of up to $10,000 or both punishments.
Hiring a lawyer is the best way to protect your company from penalties due to not complying with this regulation. A DBA Attorney can explain how this law works and verify if your insurance meets the standard requirements.
Should You Care About the Defense Base Act?
You may not be planning on becoming a government contractor any time soon. However, you should care about the Defense Base Act either way. It’s important to have your business ready for any opportunity that arises.
DBA compliance is easier than you think. It’s important to obtain the best insurance coverage that complies with this law. Don’t forget you should contact one of their approved insurers.
While you may be able to ensure compliance with this regulation on your own, you should consider consulting an attorney. A DBA lawyer can ensure you meet the applicable regulations and help you implement additional mechanisms to protect your company.
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