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The debate waged in Washington about war spending continues even as I write this blog entry.  Parties for and against using a single source provider system on government commercial insurance coverage regarding work in Iraq and Afghanistan is still going strong albeit temporarily solved.  Solved by allowing one company access and exclusivity to procuring Defense Base Act insurance for government contractors working overseas.  Even though the programs have not been very competitive over the past 24 months, a bit of relief is still on the horizon for those purchasing their insurance from the CNA/Rutherfoord programs. For the sake of this article, please note that DOD or Department of Defense Contracts are not currently governed by this monopolized Federal Program.  According to a contact with the Rutherfoord Insurance Brokerage, the rates for Defense Base Act coverage will be decreasing for work associated with US Department of State contracts.  A section of the 2008 application language states: “The current rates as of 7/21/08 are Service $4.00 per $100of payroll; Construction $5.50 per $100 of payroll; Security $10.50 per $100 ofpayroll and Aviation $20.00 per $100 of payroll.  The premium based on the above example would be $1,500 usingthe service rate.  We round allpayrolls and premiums to the nearest whole dollar.  Independent Contractor’s and Consultant’s can be included inyour payroll as long as there is a written employee agreement.”

However the rates (all are per $100.00 in payroll) will decrease on 7/21/09 to:

Service $3.60; construction $4.95; Security $9.45; and Aviation $18.00

Brian Smith, CIC, CSP, ARM

The Leavitt Group of Atlanta