1. Forms
2. WC
3. WC-00-01-01

What the Form Is

The WC 00 01 01 A, Defense Base Act Coverage Endorsement, is a mandatory endorsement for employers with employees working under contracts with the U.S. government on military bases or on public works projects outside the continental United States. The Defense Base Act (DBA) extends the provisions of the Longshore and Harbor Workers' Compensation Act (USL&HWCA) to these civilian employees. This endorsement modifies the standard Workers Compensation and Employers Liability Insurance policy to ensure compliance with the DBA by providing the required benefits and removing exclusions that would otherwise limit or negate coverage for such exposures.

Classes of Business It Applies To

This endorsement applies to a variety of businesses that engage in overseas government contract work. Examples include:

• Construction companies building or repairing facilities on overseas military bases.
• Service contractors providing logistics, security, maintenance, or other support services to the U.S. military abroad.
• Any employer performing public works contracts for the U.S. government outside the continental U.S., provided these contracts are listed and described in the endorsement schedule.
• Civilian employees working for American employers on U.S. military bases in U.S. territories or foreign countries.

For instance, an engineering firm contracted to build a new runway at a U.S. airbase in Germany, or a catering company providing food services to troops stationed in a U.S. territory, would require this endorsement.

Special Considerations

Several important considerations apply to the Defense Base Act Coverage Endorsement:

• Mandatory Coverage: For employers subject to the DBA, this coverage is not optional. Failure to secure and maintain DBA coverage can lead to significant penalties, including loss of contract, fines, and potential civil liability where the employer loses tort immunity.
• Scope of Coverage: The endorsement extends USL&HWCA-level benefits, which can be more generous than typical state workers' compensation benefits.
• Exclusion Removal: A key function of this endorsement is to remove Exclusion #8 (the Defense Base Act exclusion) from the Employers' Liability section of the policy.
• Scheduled Contracts: For public works contracts outside the continental U.S., it is crucial that these are specifically listed and described on the endorsement schedule for coverage to apply.
• Geographic Scope: Coverage applies to work on military bases in U.S. territories, possessions, or foreign countries.

Key Information for Agents and Underwriters

Agents and underwriters must be diligent when dealing with potential DBA exposures:

• Risk Identification: Agents should thoroughly question clients, especially those involved in government contracting or international operations, to identify any potential DBA exposures.
• Underwriting Assessment: Underwriters need to evaluate the specific risks associated with the overseas locations, the nature of the work being performed (e.g., construction, services, security), the number of employees deployed, and the safety protocols in place.
• Premium Considerations: Premiums for DBA coverage are typically higher than standard workers' compensation due to the increased benefit levels and potentially higher-risk environments. Rating may be based on USL&HW rates.
• Interaction with Other Coverages: It's important to understand how DBA coverage interacts with other policies the insured may have, such as foreign voluntary workers' compensation or general liability policies with overseas endorsements.
• Compliance: Ensuring the policy is correctly endorsed is critical for both the insured's protection and the insurer's compliance with federal law.