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The Journal of Workers Compensation

of Labor has authorized many insurers to market DBA insurance, only a handful are actively doing so today. Such companies are generally quite large and possess the international scope and knowledge and the special- ized expertise to underwrite this coverage profitably while managing claims handling effectively and efficiently.

GroWth CertAin, Controversy likely

What does the future hold for DBA insurance business? All indica- tions point toward the likelihood of major growth, given today’s world conflicts.

In Iraq, an estimated $100 billion will have been committed to reconstruc- tion efforts by the end of 2008; that money that will be used in a multitude of projects — most of a nonmilitary nature, such as infrastructure work on schools, roads, water projects, airports, refineries, and governmental and medical facilities. Because a large number (some estimate a majority) of these projects will be undertaken through U.S. government contracts, the people working these projects will require DBA insurance provided by their employers.

Although the major, future reconstruction focus will be on the Iraqi theater of operations, additional opportunities will probably continue to expand in other parts of the world, creating many solid opportunities for DBA insurers to meet the needs of contractors, subcontractors, and their employees. During the next three years, it is estimated that the total DBA market could increase by as much as 40 percent or even more as directives from the U.S. military and other agencies result in the outsourcing of a broad range of support services to outside companies.

At the same time, the DBA insurance market has not been without recent controversy. Some members of Congress have questioned whether insurers underwriting DBA coverage are using appropriate pricing regimens and potentially earning returns higher than would be warranted by the degree of risks they are accepting.

Congressional critics have also suggested that a single pool insurer be assigned to provide DBA coverage for all contracts let by the Department of Defense, which remains the largest source of federally funded contracts requiring DBA insurance. This would mirror the pool arrangements already used by U.S. Agency for International Development, the U.S. Army Corps of Engineers, and the U.S. Department of State. The Department of Defense has thus far resisted pressure to adopt this approach, preferring its current method of working with a number of private insurers individually.

Those interested in learning more about DBA and the rights and respon-


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