Brian S. Smith is an insurance professional with the Insurance Office of America in Atlanta, GA. He incorporates a process called “Risk Reconnaissance” which is a comprehensive method of uncovering corporate risks and insurable gaps. His work has a focus on government & defense contractors, specializing in Defense Base Act insurance. In addition to blogging, Brian hosts the Risk GovCon Podcast and is one of the founders of Atlanta GovCon.
Top 10 buying tips for Defense Base Act Insurance that are going to build confidence and simply the purchase of your next DBA policy.

Where are Rates Going?

Before we get into the Top 10 buying tips for Defense Base Act Insurance let’s review a couple of insurance carriers. AIG and Allied World Assurance Company (Allied) have maintained flat rates for both renewals and new business policies requiring Defense Base Act Insurance.  Leading indicators continue to point toward a flat rate trend due to downsizing of U.S. Government Contracting presence throughout the Middle East.  Changes may occur in other regions that could potentially increase rates in Western Africa and South America.

Other Insurance Carriers – What are they doing?

Underwriters maintain a conservative posture when considering new DBA insurance programs.  This makes it more important to have the Top 10 buying tips for Defense Base Act Insurance.  A trend supported by negative loss histories of mandated insurance programs with fixed rates based on a list of standardized classifications. These included services, construction, security, and aviation.  Faced fixed rates for a wide variety of risks within these categories and unable to underwrite to specific conditions or loss factors, costs soared as claims outpaced premiums.  CNA and Zurich were victims of this trend, attempting to profit by adding more risks to their portfolio of DBA accounts.  The result, little engagement in the current marketplace when it comes to offering coverage as losses continue to shine a negative light on the DBA insurance program.


  1. Get your pricing while preparing for the proposal, not after.  Get your Defense Base Act Insurance policy pricing before, not after, a proposal is sent in for consideration by the KO.  This will avoid contract award margin surprises. Check out the Risk Recon Quick Quote page at
  2. Work with a competent insurance professional well versed in DBA insurance and government contracting.   Sometimes it is not the work you are doing, but what you are not doing that is most important.  If your insurance agent/broker is simply sending along the Statement of Work (SOW) with the application, the underwriter may assume those listed will be performed by your company, potentially increasing your rates.
  3. Complete a NEW DBA insurance application.  Changes of ANY operations should be noted as well as countries, deployment periods, and payrolls.  That being said…
  4. Verify payroll.  Include the only payroll associated with the work while in the country under the terms of the contract.  Short term deployments should reflect the percentage of payroll related to the work defined in the contract while under the insurance coverage only.
  5. Realize that DBA insurance is not 24-hour coverage for everything a contractor may encounter. Consider worldwide medical, accidental death and dismemberment coverage, and the evacuation of personnel on a moment’s notice.  Periods of Rest and Relaxation (R&R) for personnel traveling outside of the contract scope or Kidnap and Ransom situations, Defense Base Act Insurance will not respond.
  6. Review any and all emergency response programs supported by the DBA Insurance carrier, if any, that could be used on a moment notice if needed. Perform a drill where the system is tested against a scenario likely to happen based on the location of the work or the operations in question. Practice makes perfect.
  7. Ask about sub-contractors and whether or not they can be added to your DBA insurance policy. Avoid contractual non-compliance due to coverage issues by discussing sub-contractors in your program.  Unless agreed to in advance, some insurance companies may balk at covering sub-contractors.  Always ask in advance in order to avoid costly situations.
  8. For companies associated with low-risk tasks or environments, ask your insurance professional about alternative market options that may consider your work. Insurance companies with a low-risk threshold may provide a quote that is competitive or lower than currently in place (renewal) or options for new work.
  9. Consider the rate, not the premium.  The premium is a result of several factors, of which one is the rate.  This is where I suggest you focus your attention.  The rate is critical in any current or future contracts with similar work and/or location.  When determining the price for future contracts, consider the rate when developing your model.
  10. A minimum premium may appear high when comparing to others, but ask why before you do anything else.  Time and again, clients have mentioned the minimum premium costs associated with DBA insurance.  Rightfully so.  Nonetheless, even a low payroll contract in Poland will have a minimum premium of at least $5,000 USD associated with the policy. Middle East countries have a higher minimum premium of $7,500.  Being prepared for this cost is critical to maintaining a profitable contract.  Using any available remaining premium is suggested by securing additional contracts, offsetting the high cost of the initial insurance policy.

Finally, let’s end with some math… Top 10 buying tips for Defense Base Act Insurance by the numbers

When reviewing your need for contract proposal costs associated with DBA insurance, use this simple formula:

Payroll ÷ 100 × Rate = Cost for DBA insurance

For Example:

Your payroll for a construction contract in Brazil is $1,000,000 USD with a rate of $9.50 from the insurance company providing DBA insurance. (Sample numbers for illustration only)

$1,000,000 ÷ 100 = $10,000 × $9.50 = $95,000 in premium.

For additional questions or comments, contact Brian S. Smith direct at (770) 250-0227 or via email at