What If I don’t Have DBA?

Failing to secure Defense Base Act insurance from an authorized insurance carrier or not receiving proper authorization from the United States Department of labor to be self-insured could result in serious legal problems for that organization or company. Any employer who chooses to not purchase this federally mandated insurance coverage may be subject to criminal prosecution, imprisonment, and/or hefty legal fines and restitution. Private contractors and corporations can encounter even more legal problems if Defense Base Act insurance is not secured. The executive management team (President, Secretary, and Treasurer) of the corporations can be prosecuted individually and could be held personally and severely responsible, jointly with the corporation, for any compensation that should have been paid under the act in addition to any other benefits that would normally be payable according to the Office of Workers Compensation Program (OWCP).

 

Employers that are not properly insured may find themselves in a precarious situation because an injured employee can also elect to either claim compensation under the Defense Base Act or file suit against the employer under general tort law for certain damages and injuries which occurred as a result of working for the corporation. If such as lawsuit is filed, the employer may not be able to rely on customary tort defenses that they would typically have when a lawsuit is filed against them mainly (A) the employees’ own contribution to the cause of the work-related injury or (B) negligence or dangerous activity that the employee engaged in which resulted or contributed to the employees’ injury.

 

Certain sections of the defense base act spell out who is responsible for purchasing the coverage and the ramifications for not securing this federally mandated coverage. Specifically, section 4(a) which addresses the employer’s potential liability if coverage is not secured and section 5(a) which speaks to the primary contractor relationship to any subcontractors and who is responsible for securing Defense Base Act insurance.

 

Section 38(a) covers specific charges if a contractor is found guilty of not securing Defense Base Act insurance and it also outlines the punishment, fines, and possible imprisonment for not complying with the act.