This is liable.
An institution or a business organization keep the stock for the processing of taxable activity.Therefore the insurance claim can identified as a part of taxable activity.
As per the section 83 of Value Added Tax of No 14 of 2002 the taxable activity is described as follows,
“taxable activity” means –
(a) any activity carried on as a business, trade, profession or vocation other than in the course of employment or every adventure or concern in the nature of a trade ;
(b) the provision of facilities to its members or others for a consideration and the payment of subscription in the case of a club, association or organization ;
(c) anything done in connection with the commencement or cessation of any activity or provision of facilities referred to in (a) or (b) ;
(d) the hiring, or leasing of any movable property or the renting or leasing of immovable property or the administration of any property;
(e) the exploitation of any intangible property such as patents, copyrights or other similar assets where such asset is registered in Sri Lanka or the owner of such asset is domiciled in Sri Lanka;