Insurance Law

Contact: Michael Bath, Special Counsel and Christian Breen, Associate; Carter Newell (Queensland, Australia) 

Introduction

It is typical for insurance policies to include conditions which entitle an insurer to reduce a claim payment by the amount of any input tax credit to which an insured may be entitled.  In early 2013, Dalton J of the Supreme Court of Queensland¹ considered that where the amount of the claim exceeded the sum insured, the amount to which an insured was entitled was the sum insured less the notional input tax credit.  The decision created somewhat of a stir because it meant that where the loss exceeded the sum insured, the insurer could never be required to meet its contractual promise.

The Queensland Court of Appeal recently revisited this issue.²

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