Tax Liability insurance

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Specialist Tax Liability coverage for known tax risks

DUAL provides tailored Tax Liability insurance to protect your clients from the financial impact of known tax risks. Coverage can support M&A transactions, corporate restructurings and tax reserve  management, helping clients move forward without leaving a material tax position unresolved.

IRS guidance on credit transferability lists 11 transferable clean energy credits and confirms transferees may be liable if certain credits are later disallowed or recaptured, adding technical risk for brokers supporting tax credit transactions. Tax Liability insurance can transfer the risk and protect the deal’s economics.

Our North American Tax Liability offering combines local market expertise with the reach of a global Tax practice. Drawing on experience across tax law, accounting and M&A, our underwriters work directly with brokers and advisors to understand each technical position and tailor coverage to the risk.
 

100+

Transactional Risk experts globally

A+ and A

S&P and A.M. Best-rated carriers

In-house claims

handled by an experienced team

Key benefits

Transfer a defined tax risk to the insurance market to help your clients protect their balance sheets and move forward with greater certainty.

  • Transaction certainty

    Reduce the need for purchase price adjustments, special indemnities or escrow arrangements, helping transactions close,

  • Balance sheet protection

    Transfer a known tax risk to A-rated carriers and protect your client’s balance sheet from an adverse determination.

  • Cost certainty

    Transform a potentially open-ended tax liability into a quantifiable insurance premium.

  • Clean exit

    Avoid retention structures or holdbacks, freeing up transaction proceeds and reducing ongoing risk for sellers and investors.

What does tax liability insurance cover?

Tax Liability insurance protects against financial loss resulting from a successful challenge by a taxing authority. Each policy is tailored to the specific risk and can stand alone or be coordinated with DUAL RWI coverage.

Covered losses can include:

  • Additional tax due following a final determination
  • Interest and penalties associated with the additional tax
  • Advance tax payments or guarantees required before a dispute is resolved
  • Defense and contest costs, including legal and advisory fees
  • Gross-up payments for tax imposed on the insurance proceeds 
Tax Liability

Who we work with

We work with brokers and advisors to provide tailored Tax Liability coverage for a wide range of clients with domestic and cross-border tax risks, including:

  • Private equity funds
  • Institutional investors
  • Financial institutions
  • Advisors
  • Corporations
  • Alternative investment managers
  • Tax credit buyers, sellers and project sponsors

Give your clients greater certainty with tailored solutions for a wide range of risks arising within transactions or through routine tax management.
 

Target classes

Access specialist coverage for a broad range of known U.S. and cross-border tax risks, whether connected to an M&A transaction, a corporate restructuring or a standalone tax position. Every risk is considered on its own merits. Speak to our Tax team to discuss the risk, relevant jurisdictions and available coverage. Our risk appetite includes:

  • Tax-free reorganizations, mergers and spin-offs

  • Section 338(h)(10) elections and S corporation risks

  • REIT qualification risks

  • Partnership tax issues

  • Tax credits, including historic rehabilitation and energy credits

  • Validity and availability of net operating losses

  • Foreign Investment in Real Property Tax Act (FIRPTA) exposures

  • Matters addressed in a tax opinion or tax indemnity

  • Specific tax matters not covered under a RWI policy

  • Certain state and local tax matters

Underwriting requirements

To assess a risk as efficiently as possible, we’ll typically ask for:

  • A tax opinion from a qualified tax advisor setting out the relevant facts, authorities, analysis and technical strength of the tax position

  • A detailed breakdown of the potential loss, including additional tax, interest, penalties, defense and contest costs and any gross-up

Claims

DUAL Transactional Risk aims to provide a best-in-class claims function. Our approach on every notification we receive is built around three principles:

  1. Prompt engagement

  2. Clear analysis

  3. Fair outcomes
     

For more information, including claims team contact details, please visit our global Transactional Risk claims page.

$400+ million

paid in claims since 2022

7 specialist

claims professionals

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Transactional risk

Our global Transactional Risk team

Visit our meet the team page to view the full Transactional Risk team for each product and region, including direct contact details for inquiries and support.

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