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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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Public Liability Claim Scenarios

Public Liability Claim Scenarios

Public Liability Claim Scenarios fit into two areas 1) Personal Injury or 2) Property Damage.

In the past 12 months Insure 247 has processed a number of public liability property damage claims, these have included damaged scales by a cleaning business, broken shower glass by a plumber and broken windows by a lawn mowing contractor.

Personal injury claims are a little less common but tend to be a higher dollar value. Some insurers will offer a zero excess on personal injury claims.

In the event of a claim call your broker first because many, like Insure 247 will have a free claims assist service

If you are still unsure speak to a broker call 1300 046 787 13000 Insure

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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 the inaccurate or incomplete information. You should consider whether the advice is appropriate in light of your objectives, financial situation, and needs