Does GST impact on my public liability claim settlement?

Does GST impact on my public liability claim settlement?

There is no goods and services tax (GST) payable on insurance settlements as long as the entity that paid the premium informs the insurer of its entitlement to an input tax credit on the premium at (or before) the time a claim is made.

When an insurer pays out a cash settlement on a claim, it is common practice for them to reduce the settlement amount by 1/11th if the insured is entitled to a full input tax credit.

The rationale for doing this would appear to be that the insurer considers they are only required to indemnify the insured for the actual loss incurred. If the insured is entitled to claim a full input tax credit on the replacement item, the insurer may consider that the entity's loss is less than it would have been if they could not claim an input tax credit.

If, on the other hand, the insurer contracts with a supplier to provide a service to the insured, and undertakes to pay the settlement monies direct to the service provider in full settlement of the account, the insured is not entitled to claim an input tax credit for those payments by the insurer to the service provider. For this to apply, the insurer must meet the other requirements set out in paragraph 6 of Goods and Services Tax Ruling.

Keep your broker up to date with your current tax status

During your claim, it is important to keep your broker up to date with your current tax status and your preferred settlement option.

If you are still unsure about public liability insurance speak to a broker call 1300 046 787 13000 Insure

Steve Sloan

Steve is a licensed insurance broker with Insure247

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Please note that any advice given has been provided without taking into account your objectives, financial situation or needs. It is also based on information we have obtained from you. You must ensure the information is accurate and complete. Otherwise, this advice may be based on inaccurate or incomplete information. You should consider whether the advice is appropriate in light of your objectives, financial situation and needs

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What is goods in physical or legal control?

What is goods in physical or legal control?

With many public liability policies, you will see the inclusion of cover for goods in physical or legal control, many people believe that this offers the policyholder protection for their laptop or smartphone, unfortunately not.

What are goods in physical or legal control actually?

This covers your customer’s goods that you may be repairing, storing or it may be goods purchased by your clients that are awaiting delivery or pick up. It also covers goods that your company has accepted responsibility to insure under a formal consignment agreement.

This cover offers your business protection from loss or damage to those goods.

What level of cover should you have?

Check with your broker to see how much cover is in the policy, for example, most will have $250,000 as a standard offer, then consider the potential loss

“For example, if you’re a mechanic repairing a 2012 Ferrari 458, with a value of $400,000,  it may be best to discuss with your broker to get an increase on the level of cover for goods in physical or legal control.”

If you are still unsure about public liability insurance speak to a broker call 1300 046 787 13000 Insure

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General Advice Warning

Please note that any advice given has been provided without taking into account your objectives, financial situation or needs. It is also based on information we have obtained from you. You must ensure the information is accurate and complete. Otherwise, this advice may be based on the inaccurate or incomplete information. You should consider whether the advice is appropriate in light of your objectives, financial situation, and needs

Does public liability insurance cover my advice

Does public liability insurance cover my advice?

At Insure 247 we are often asked does public liability insurance cover a loss as a result of my advice?

For almost every business in Australia, when carrying out their normal business activities there is a potential for a claim from a loss resulting in a legal liabilities including personal injury or property damage claim. So you should have public liability insurance cover.

Does your occupation offer advice?

But when your occupation or product is the advice you offer i.e Accountants, health services, financial planners etc. Professional indemnity insurance will be required as additional cover for claims arising out of an actual or alleged breaches of your professional duty, this would not be covered in your public liability insurance policy.

Does public liability insurance cover my advice?

See also:

What does Broadform Liability Cover

What is legal liability

If you are still unsure about public liability insurance speak to a broker call 1300 046 787 13000 Insure

Steve Sloan

Insure 247 Pty Ltd  ACN: 612944215 is an Authorised representative of Ausure Pty Ltd Australian Financial Service License Number 238433

Steve Sloan Insure 247

Steve is a licensed insurance broker with Insure247

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Insure 247 Australia is a member of the largest insurance broker network in Australiasia, the Steadfast Group.
Comprised of 306 brokerages with over 500 offices, the group generated over $5 billion in insurance sales in FY14. This scale gives Steadfast enormous buying power, flexibility and influence when negotiating with major insurers on behalf of Steadfast brokers and results in us being able to provide our customers with access to multiple insurance companies, a broad range of products, competitive pricing, valuable advice and quality service.
As a Steadfast network insurance broker, you get the best of both worlds – local and personalised service, with the insurance expertise and support of a large organisation.

Please note that any advice given has been provided without taking into account your objectives, financial situation or needs. It is also based on information we have obtained from you. You must ensure the information is accurate and complete. Otherwise, this advice may be based on inaccurate or incomplete information. You should consider whether the advice is appropriate in light of your objectives, financial situation and needs. Please read the Product Disclosure Statement and contact us if you require any clarification.

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