Defense Base Act Insurance

• Any LSU employee working on a military base or reservation outside the U.S.
• Any LSU employee engaged in U.S. government-funded public works business outside the U.S.
• Any LSU employee engaged in a public works or military contract with a foreign government which has been deemed necessary to U.S. national security.
• LSU employees that provide services funded by the U.S. government outside the realm of regular military issue or channels.
• LSU employees of any sub-contractors of the prime or letting contractor involved in a contract such as numbers 1-4 above

DBA insurance must be requested for each international trip, meeting the requirements listed above utilizing the Defense Base Act Insurance Request Form. This form will request details regarding the employee and trip, including payroll while traveling. To calculate payroll for salaried employees, divide their annual salary by 365 then multiply the daily rate by the number of days traveling. (i.e. Annual Salary $50,000/365 = $136.99 Daily Rate * 8 Travel Days = $1,095.89 Payroll) 

Cost for DBA insurance will be charged to each department. The cost for DBA insurance will be $3.50 per $100 of payroll incurred while traveling. Based on the example above, an employee payroll of $1,095.89 incurred while traveling would cost $38.35. Many grants and contracts allow for DBA cost to be reimbursed, and budgeting for such cost should be discussed with Sponsored Programs.

Failure to obtain DBA insurance carries stiff penalties. All government contracts contain a provision that requires bidding contractors to obtain necessary insurance. Failure to do so will result in fines and possible loss of contract. The additional, and most severe penalty, is that employers without DBA Insurance are subject to suits under common law, wherein common law defenses are waived. In other words, the claimants, or their heirs, need only file suit and do not have to prove negligence. Lastly, all claims may be brought in Federal Court and are directly against the insured.

DBA insurance  is required, as previously stated for Contracts, with any branch of the United States Government. Often, contracting officers will note a document is a “Grant”, but the Scope of Work and deliverable meet the definition of a Contract. 

The existence of a contract requires finding the following factual elements:

• an offer
• an acceptance of that offer which results in a meeting of the minds
• a promise to perform
• a valuable consideration - which can be a promise or payment in some form
• a time or event by which a performance must be made to meet commitments
• terms and conditions for performance, including fulfilling promises
• performance measures.

Grants will often be for a defined purpose and may indicate a period of time, but the other components that make up a technical contract are missing. An example might be a Grant of $2 million USD to improve children’s health issues in Haiti. A Contract, regardless of the naming of the document, will state a period of performance, may include deliverables, an audit provision, salaries, allocations for transportation and supplies, and insurance requirements.