Public liability insurance—community organisation exemption

Exemptions may apply to public liability insurance taken out by a non-profit community organisation for a risk relating to the organisation’s community purpose activities. This exemption applies to:

• public liability insurance cover
• product liability insurance (including legal liability connected with goods or their containers sold or supplied by the insured)
• insurance for directors’ and officers’ liabilities (including legal liability connected with the performance of these roles for the insured).

The exemption does not apply to professional indemnity insurance (which covers legal liability connected with a breach of the insured’s professional duty).

Your organisation can claim a public liability insurance duty exemption if:

• it is an incorporated or unincorporated grassroots community non-profit organisation that
  • does not operate for the profit or gain of its members
  • uses its income and property solely for its principal community purpose and not for distribution to its members
  • has rules that state that if the organisation is disbanded, any surplus assets are to be transferred to another community non-profit organisation or applied to a charitable purpose
• it has an organisational and administrative structure and controls its own affairs (trusts are not exempt)
• membership is open to the public
• members give their time voluntarily
• it is formed, and carried on, mainly for one of the lawful community purposes listed below.

If your organisation’s purpose is not listed, but has a similar purpose to those listed below, you can apply for the exemption and we will review your circumstances.

Lawful community purposes

Arts & cultural	Environment & conservation	Community, family & youth
bands, orchestras dance societies eisteddfod societies local galleries local theatre companies music festivals other performing arts	animal liberation conservation and land care societies wildlife preservation societies	counselling fund-raising groups parents and citizens’ associations shelters support volunteer services

Multicultural	Heritage & historical	Sporting & recreation	Craft
international societies migrant centres	historical societies local museums	amateur sporting clubs and associations scouts, guides and similar groups	clubs

Your organisation cannot claim the exemption if it falls under the following categories:

• government
• public sector
• statutory
• commercial and business organisations, bodies, authorities or trusts
• political or union organisations
• organisations controlled, appointed by or representing or promoting business or government sectors
• organisations that are registered or entitled to be registered as charitable institutions under Part 11A of the Taxation Administration Act 2001
• non-profit community organisations with significant business or commercial activities and interests. These are organisations that
  • hold a statutory license to conduct a commercial activity (excluding a category 3 game license, bingo centre license, general purpose permit liquor license, restricted club permit liquor license or local authority approval of premises for food preparation and sale or to hold a special event)
  • charge for services, participation in activities or attendance at events or offer prize money (other than membership fees, fund-raising activities or activities in pursuit of their main objects)
  • have assets with a gross value (i.e. before liabilities) of more than $1 million or gross revenue (i.e. before expenses) of more than $500,000 for a financial year.

If your organisation fails either of the financial tests because it operates on a state, national or affiliated basis, you may apply for a review of your circumstances to determine whether your organisation has a significant business or commercial focus. 

Gross revenue

When calculating gross revenue, you can disregard:

• revenue from fund-raising activities if they are not the organisation’s main pursuit (e.g. raffles or street stalls held by amateur sporting clubs)
• government grants for community purposes.

Apply for exempt status by completing a Form 8.3—Non-profit community organisation insurance duty exemption (PDF 350 K).

If approved, we will send you an approval letter. You will need to give this to your insurer to claim the exemption.

To be eligible for the exemption, the insurance cover must be provided either:

• under a stand-alone policy (i.e. it provides public liability cover only)
• as part of an insurance package (i.e. the policy covers risks in addition to public liability)
• under a master policy relating to a group scheme.

The premium for the exempt public liability insurance must be separately identified on the premium invoice for the exemption to apply.

For insurance packages and group scheme master policies, a partial exemption applies to the extent that the policy relates to the public liability insurance that is exempt from duty under these proposals.

Insurer requirements

Insurers do not have to include the policy in their relevant duty return (to the extent that the policy is exempt from duty) if they sight an exemption letter. If only a partial exemption applies, duty must be paid on the dutiable portion.