Overseas Civilian Contractors

News and issues relating to Civilian Contractors working Overseas

New Procurement Process for DBA Insurance State Department Contracts

Clements Worldwide Cautions Contractors about New Procurement Process for DBA Insurance

See also Defense Base Act Insurance State Department Solicitation (Cancelled)

See also Documents showed that CNA reported the highest profits margins, taking in nearly 50 percent more in premiums than it paid out in benefits.

Clements Worldwide, leading provider of international insurance solutions, reports the U.S. State Department’s pre-negotiated agreement with insurer CNA for the provision of Defense Base Act (DBA) coverage has been suspended. As a result, all DBA policies with renewal dates of July 22, 2012 or later must be placed on an open market basis. Consequently, contractors may be subject to:
• Higher rates: o Minimum premiums now apply, which could be significantly more expensive for
contractors with operations in Iraq or Afghanistan.

• More complex procurement: o Brokers must now present risk in order to obtain quotes.
o Insurers will now require claims experience information in order to rate individual
accounts.

• Varying limits: o Although basic coverage will remain the same, certain extensions (such as evacuation)
may have varying limits depending on the insurer.

“Failure to obtain DBA insurance for all covered employees not only subjects an organization to the risk of potential lawsuits by its employees, it also exposes the company and its officers individually to possible Labor Department fines and criminal actions,” says Smita Malik, assistant vice president at Clements. “DBA cover is therefore not only an important requirement of any robust compliance program, but also an important step in mitigating potential liability arising from covered employee activities.”

Malik urges all U .S. government contractors and subcontractors to promptly consult with an authorized DBA insurance expert to ensure proper compliance with the State Department’s new requirements.

August 7, 2012 - Posted by | Afghanistan, Civilian Contractors, Defense Base Act, Iraq, State Department, USAID | , , , ,

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