DEFENSE BASE ACT

1
DEFENSE BASE ACT
2
Defense Base Act

• Defense Base Act (DBA)
• History Purpose
• Where does it apply?
• Who is covered?
• Zone of Special Danger
• War Hazards Compensation Act

3
Defense Base Act

• History Purpose
• Defense Base Act, 42 U.S.C. Section 1651, et seq
  enacted by Congress in August 1941
• Extends the benefits payable under Longshoreman
  and Harbor Workers Compensation Act, 33 U.S.C.
  Section 901, et seq (LHWCA)
• Original goal To provide compensation for
  disability and death to civilians employed at
  American military bases outside the Continental
  U.S.
• Scope of Act amended (after WW II) to include
  public work contracts with the U.S. government
  for building of non-military projects outside the
  U.S.

4
Defense Base Act

• Where does it apply?
• Today DBA covers the following employment
  activities
• Working for private employers on U.S. Military
  bases or on any lands used by the U.S. for
  military purposes outside of the United States,
  including those in U.S. Territories and
  possessions
• Working on public work contracts with any U.S.
  government agency, including construction and
  service contracts in connection with national
  defense or with war activities outside the United
  States
• Working on contracts approved and funded by the
  U.S. under the Foreign Assistant Act, generally
  providing for cash sale of military equipment,
  materials, and services to its allies, if the
  contract is performed outside of the United
  States
• Working for American employers providing welfare
  or similar services outside of the United States
  for the benefit of the Armed Forces, e.g. the USO.

5
Defense Base Act

• Who is covered?
• Any employee engaged in employment of contracts
  listed above regardless of nationality.
• All employees of sub-contractors and their
  sub-ordinate contractors of the prime contractor.
• The Prime Contractor is responsible for ensuring
  that the subcontractor has required DBA
  insurance.
• If the subcontractor fails to secure DBA
  coverage, the prime contractor will be liable for
  and be required to secure the payment of such
  benefits.
• If any employer fails to secure DBA they can face
  fines and imprisonment.
• If the employer is a corporation and fails to
  secure DBA, the president, secretary and
  treasurer shall be severally and personally
  liable, jointly with the corporation, for any
  compensation or other benefits payable under the
  Act for injury or death which may occur to any of
  its employees.

6
Defense Base Act

• Zone of Special Danger
• DBA will provide compensation for injury or death
  of an employee arising out of and in the course
  of employment.
• Zone of Special Danger Doctrine challenges this
  traditional concept of causal relationship.
• Zone of Special Danger U.S. Supreme Court in
  1951 defined the scope of compensability under
  the Defense Base Act as follows
• The test of recovery is not a causal relation
  between the nature of employment of the injured
  person and the accident. Nor is it necessary that
  the employee be engaged at the time of the injury
  in activity of benefit to his employer. All that
  is required is that the obligation or condition
  of employment create the zone of special danger
  out of which the injury arose.

7
Defense Base Act

• Zone of Special Danger (continued)
• Reasonable Recreation
• Injury from certain recreational activities while
  off-duty may be compensable. Courts have ruled
  that
• Employees working under the Defense Base Act, far
  away from their families and friends, in remote
  places where there are severely limited
  recreational and social activities, are in
  different circumstances from employees working at
  home. Personal activities of a social or
  recreational nature must be considered as
  incident to the overseas employment relationship.
• The harsher or more remote the environment, the
  more likely a court will find compensability.
• Despite broad interpretation of the courts not
  a 24-hour cover.

8
War Hazards Compensation Act (WHCA)

• War Hazards Compensation Act
• Enacted at the request of the Secretary of War in
  December 1942.
• Shortly after U.S. entry in WWII most insurance
  carriers were reluctant to underwrite DBA
  exposures for employees exposed to the hazards of
  war or otherwise required to work in a war
  setting.
• WHCAs purpose to induce insurance carriers to
  provide DBA coverage for employees in hostile or
  war-like settings.
• WHCA provides full reimbursement to the insurer
  of all paid compensation and medical benefits
  (including ALE) for losses from a war risk
  hazard. Reimbursement includes 15 handling fee
  and complete relief of future obligations (U.S.
  Government take over administration of claim) and
  is paid from the Employees Compensation Fund.

9
War Hazards Compensation Act (WHCA)

• War Hazards Compensation Act (continued)
• WHCA provides compensation to overseas employees
  of contractors and certain other employees for
• Injury or death due to a war-risk hazard
• Detention by a hostile force or person
• Three requirements for WHCA reimbursement
• Injured employees employment must come within
  the WHCA provision (e.g. DBA)
• Injury must have occurred from a war risk
  hazard
• The carrier must not have charged its insured a
  premium for war risks hazards

10
War Hazards Compensation Act (WHCA)

• War Hazards Compensation Act (continued)
• War Risk Hazard defined as a hazard arising
  during
• A war in which the U.S. is engaged
• An armed conflict in which the U.S. is engaged
  whether or not war has been declared
• A war or armed conflict between military forces
  of any origin, occurring within any country in
  which a covered employee is serving
• The hazard arises from
• Discharge of a missile, including liquids and gas
  or the use of weapons, explosives, or other
  noxious things by a hostile force or person
• Action of a hostile force or person, including
  rebellion or insurrection against the U.S. or any
  of its allies

11
War Hazards Compensation Act (WHCA)

• War Hazards Compensation Act (continued)
• Hostile force or person is defined as
• A nation, a subject of a foreign nation, or any
  person serving a foreign nation engaged in
• A war against the United States or any of its
  allies
• Armed conflict, whether or not war has been
  declared against the United States or any of its
  allies or
• A war or armed conflict between military forces
  of any origin in any country in which a person
  covered by the WHCA is serving.
• The statutory definition of war-risk hazard does
  not specifically address terrorist attacks but
  the term has been liberally interpreted to
  include any and all actions of insurgents,
  terrorists, rioters and proponents of violence
  directed toward American interests.
• Quote from Department of Labor Our procedures
  specifically contemplate consideration of
  terrorist activity as a war risk hazard. Bottom
  line Terrorist activity must be considered in
  conjunction with the definitions of war-risk
  hazard and hostile force or individual.