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Tax Liability Insurance


Tax risk can be an unwelcome distraction or an obstacle to getting a deal done – we can help you move forwards.

Our Team are very experienced international M&A tax professionals and we understand the time and commercial pressures involved with a sale process. Our clients can expect a premium service that resolves their tax problem, with clear communication (in simple language), proactive problem-solving, a straightforward process, and rapid response times.

We can provide a quote for insurance within 48 hours for any jurisdiction and will work with you and your advisers to meet any deadlines. We are supported internationally by a network of top-tier tax counsel who regularly advise on M&A transactions and are familiar with our process, which enables us to provide a premium service no matter the jurisdiction(s) involved.

And afterwards our Claims process is capable of dealing with complex matters as efficiently as possible and supported by robust Risk Capital provided by major insurers.

For more information about Brockwell and our appetite see About Us and Risk Appetite. If you are a private equity sponsor our Institutions / Funds section has sector-specific details.

Get a quote here.

How can tax liability insurance help me?

Tax insurance can be used to facilitate an M&A transaction or break through a commercial deadlock. It is typically used either to manage risk in relation to identified historic risks or in relation to the transaction structure.

Historic Risk

Where a tax risk is identified as part of due diligence or by a seller in preparation for a disposal, then tax insurance can be used:

  • as an alternative to:
    • an indemnity (or can financially protect a seller that has given an indemnity)
    • an escrow
    • a price adjustment
    • seeking a ruling from a tax authority
  • to provide cover for matters excluded from W&I insurance
  • to offer more comfort than an adviser’s opinion or advice
  • to assist with obtaining favourable financing terms
  • as a way of increasing the financial cover and covenant strength available

Transaction Structure

We can cover both how the transaction itself will be treated for tax purposes and any risks arising from the buyer’s acquisition structure.

With a transaction it can be uncertain what taxes will apply to an asset sale (Do the assets comprise an enterprise?) or what the stamp duty / transfer tax treatment of a transaction is. We can offer a tax policy confirming this.

A tax policy can also provide comfort around the acquisition structure. For example:

  • Will seller consideration be treated as capital or revenue? e.g. deferred consideration
  • Will debt be fully deductible? e.g. following a post-completion merger of finco and bidco
  • Can cash be repatriated back from the target group to the buyer without adverse tax consequences?


Yes. Ideally, we would be contacted with more time (see further FAQ below) but we understand that tax issues can crop up at the eleventh hour and stall a transaction.

To achieve an expedited timeline we recommend that you contact us / your insurance broker immediately with the information required for us to quote (see below). Our counsel are very responsive and we have underwritten risks under accelerated timelines. However, in order to achieve this we require information to be proactively provided to us and the nature of the risk must be straightforward.

We regularly cover risks identified in due diligence or as part of structuring that W&I insurers have excluded from cover. Not all W&I insurers have in-house tax expertise and so may not be able to offer standalone cover. Please Contact Us for more information.

Yes. We can put insurance in place in a very short period of time (see details below). In order for us to consider terms, please provide the information set-out below. Where a ruling has been considered, it is very helpful if your adviser can provide the detail that they would have provided to the tax authority (given we are fulfilling the role of the tax authority in this instance) together with any advice in respect of the risk.

Where a risk has been identified prior to commencing a sale process, it is possible to engage Brockwell to undertake a sell-side underwriting process. This can mitigate any indemnity, escrow or price adjustment that a buyer might otherwise propose or a delay to a transaction whilst awaiting a clearance or ruling. It is particularly helpful in a competitive auction process.

The insurance can either be structured with the policy incepted before or at completion of the sale. Either way it is expedient to engage Brockwell and complete underwriting with the seller before either incepting or ‘flipping’ to the appointed buyer.

Commonly an incepted or advanced draft of the policy together with a note explaining the risk will be included in the data room.

Obtaining a quote costs nothing and is very quick. Please visit Quotes.

You can also get a quote for tax insurance by contacting your insurance broker (or the W&I broker on the M&A deal) and providing our contact details. We can recommend a specialist tax insurance broker if you don’t have one.

We typically provide indicative terms of insurance within 48 hours from receipt of the request for terms, but we can provide a quote within 24 hours in exceptional circumstances.

Please see Process for more information.

When seeking a quote for tax insurance the following information should be provided: (i) an outline/description of the tax risk, (ii) details and analysis of any facts relevant to the risk (both positive and negative), (iii) a calculation of the financial cover required, (iv) details of what insurance is required (e.g. who is the insured, policy period, limit of liability, etc), and (v) copies of any tax advice in relation to the risk.

No, but a note from a third party tax adviser (even by-email) will significantly improve the pricing and certainty of a quote. We will have a better understanding and so can price the risk more accurately and will need to assume less about the factual background. An external note also ensures that anything potentially problematic is highlighted (e.g. an ongoing audit or unhelpful factual aspect). If we make a material finding during underwriting then we may need to change our terms

Once appointed to underwrite, we can issue a finalised policy within five business days although on average it takes two weeks. In exceptional circumstances and depending on the nature of the risk it may be possible to truncate this process.

Please see Process for more information.

The cost of tax insurance will typically comprise the premium, applicable premium taxes, an underwriting fee, and broker commission.

A single, up-front premium is payable. Our minimum premium is typically £85,000 (or equivalent) and we typically charge between 2% and 8% of the limit of liability sought. The applicable insurance premium tax will depend on the location of the policyholder. However, we consider each transaction on its own merits and exceptionally we can offer a lower premium.

Our external expenses vary according to the complexity/size of the risk and the scope of work required. Typically, our external expenses are £10,000 – £30,000 (or equivalent).

The structure of your insurance broker’s commission will depend on the agreement they have with you. Typically, brokerage is a percentage of the premium (and we will provide a gross premium quote, i.e. inclusive of brokerage), but some brokers work to a fixed fee with their clients.

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