Clarke & Sampson Blog

Government Contractors: It's Time to Consider Business Travel Accident (BTA) Coverage

Dan Yokoyama | Friday, April 24, 2020

Oftentimes, government contracts require contractors, both prime and subs, to carry what is called Defense Base Act (DBA) insurance. This form of international insurance is often accepted as a cost of doing business with Federal U.S. Government. Not only is it statutory, but DBA insurance is there to protect your workforce similar to how a domestic workers compensation policy would within the respective coverage territory. Many government contractors based in the US will purchase DBA insurance and walk away thinking that their workers will be fully covered for work outside of the US, Canada, and US territories. However, DBA insurance alone is not always enough. Oftentimes, there are significant coverage gaps resulting from not also purchasing supporting insurance coverages such as Business Travel Accident (BTA) Insurance.

Long-duration and frequent work outside of the US, its territories, and Canada can create coverage gaps for businesses that decision makers may not be aware of. Even government contractors with proper DBA insurance to cover their overseas work for the US Government may not be fully covered for all of their exposures. Not having adequate protections in place can make it hard for employers to prove that they have met their “Duty of Care” obligations to their work force should a claim arise. Also, the human cost and toll on morale resulting from inadequate resources to address emergency events abroad can have potentially devastating effects on any business’ bottom line and reputation.

Business Travel Accident Insurance provides additional protections to help ensure that employees are being properly protected. Oftentimes, government contractors will win contracts where daily life may not be limited to the confines of a US base or combat outpost. In cases where work may be in lower-threat countries, workers may venture out for dinners, sight-seeing, or other social events during off-duty hours. Off-duty activities may be construed to be outside of the scope of work associated with the US Government’s mission meaning that DBA insurance may not respond to a loss associated with injury or death to a worker. BTA insurance could potentially fill the gaps associated with these exposures.

BTA insurance is there to provide coverage medical expense, accidental death/dismemberment, repatriation of remains, secure evacuations, etc. BTA insurance also allows an insured business to leverage the expertise and additional resources that an insurance company can bring to the table to address whatever covered incidents may occur. Again, not only may procuring this coverage be the right thing to do in order to ensure that employers are properly addressing their employees’ needs involving international travel, but it may also be deemed necessary for a business to adequately meet its “Duty of Care” obligations to its employees.