Division of Longshore and Harbor Workers' Compensation (DLHWC)
Loyola Law School
U. S. Department of Labor OWCP
DBA Conference
October 2008
Insurance and Waivers
John Chamberlain
Office of Workers’ Compensation Programs
Division of Longshore & Harbor Workers’ Compensation
Insurance
The provisions of the Longshore and Harbor Workers’ Compensation Act and its Regulations apply to the Defense Base Act
4(a) makes the employer
Liable for the benefits
Obliged to secure the benefits
Insurance
32(a) (1) provides for insurance by an authorized carrier
32(a) (2) provides for self-insurance
Insurance
5(a) Failure to secure payment allows employee either to collect compensation, or to sue employer for damages
The defenses of “fellow servant”, “assumption of risk” and “contributory negligence” are not available
Insurance
38(a) The corporation and its president, secretary and treasurer are severally liable for a fine of $10,000 and imprisonment for not more than one year.
The president, treasurer and secretary are also severally liable jointly with the company for the benefits during the period it fails to secure compensation
Insurance
Failure to report a claim carries a separate penalty of up to $11,000.
Failure to report a claim waives the time bar
Failure to controvert a claim requires 10% additional compensation for each amount unpaid.
Insurance
The Employer may be Uninsured
nsured by an unauthorized carrier
Insured by an authorized carrier, but have no DBA endorsement
Operating under a waiver which is not effective
Insurance
The Employer is responsible, not
The broker or agent
The government contracting officer
The insurance company
The attorney
The Department of Labor
Insurance
The Employer is also responsible for all
Subordinate contractors
Subcontractors
Consequences
There are both civil and criminal proceedings for which
The company
Its President, Treasurer and Secretary
Each needs separate representation –
8 lawyers in all.
The compensation case is now a $50m Lawsuit
Consequences
The contract was bid without the cost of DBA included.
The premiums must be paid without reimbursement
Consequences
And this may all be because of a subcontractor, or the subcontractor’s subcontractor.
Consequences
BROKERS
You are compensated for providing cover
You are at risk of an E & O claim if you do not
Waivers
The Secretary of Labor
On the recommendation of
The head of
Any department or agency
In the exercise of her discretion, may
Waive the application of this section with respect to
Any contract, subcontract or subordinate contract
Work location under such contracts
Or classification of employees
Waivers
Waivers are routinely granted when
Submitted by the proper person
In the proper form
Subject to limits and conditions
Waivers apply to Guam for all employees including US nationals.
Waivers
Do not apply to
US Citizens
People hired in the US
Legal residents of the US
Do not apply unless waived employees will receive compensation under local laws providing for workers’ compensation for injuries, illness or death.
Waivers
Each contractor must before commencing performance
Provide and maintain
For all waived employees
Workers compensation insurance as required by the law of the place of the work
With no exclusions e.g. for war hazards
Waivers
If there is no local workers compensation law
Nationals are covered under DBA
If a worker is NOT covered by another compensation act for any reason
