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Tax Liability Insurance

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If you are already experienced with tax insurance, please select:

I am a broker / adviser
I have a tax risk relating to an M&A transaction
I have a tax risk relating to institutions / funds
I have a tax risk relating to personal tax
I urgently need a solution for a tax risk

What is tax liability insurance?

A tax liability insurance policy gives an indemnity to the policyholder for an identified tax risk.

Tax authorities have more information about taxpayers than ever before and are increasingly becoming more challenging, whilst the tax environment is both politicised and complex. Revenue collection will be in sharp focus as governments look to recover from the coronavirus pandemic. This means that clients need more comfort around tax risk.

Tax insurance helps by offering cover for an identified tax event allowing a taxpayer to reduce or eliminate a tax exposure. The insurance can be used very broadly to cover any financial loss triggered by a ‘tax event’ and provides certainty regarding the interpretation of tax law.

Without tax insurance a transaction may stall or abort, but a tax policy can be used to facilitate activity by mitigating risk. The policyholder may be a buyer getting comfortable with a risk in the target group, a business dealing with an operational risk (e.g. VAT/GST), a fund dealing with a risk in its investment structure, or a seller seeking peace of mind so that they can spend their sale proceeds.

Provided that we agree with the legal position to be insured and are comfortable that the risk of a successful tax authority challenge is sufficiently ‘low’ for our appetite, Brockwell can provide certainty with a tax policy.

Our Team particularly specialises in risks relating to M&A, Institutions & Funds, and Personal Tax. Our team is led by Richard Taylor-Whiteway who is ‘Top Recommended’ in the Spear’s 500 index for insurance.

See the FAQs below for further information.

Brockwell Cover – Headline Details


any financial loss triggered by a ‘tax event’

Limit of Liability

up to £45m (or local equivalent)

Minimum Premium

typically £85,000 (or equivalent) excluding applicable taxes


no restrictions except pure USA risk (see FAQs below)


unlike some insurers we can insure individuals as well as corporates

Policy Period

up to a maximum of 7 years

Policy Excess

defence costs only


we have both legal and accounting expertise

See the FAQs below for further information.

Why Choose Brockwell

Our Team are tax insurance experts and their experience with underwriting complex international tax risks means that you are in safe hands with Brockwell. Our in-house tax law and accounting expertise allows us to assist clients with a broad range of risks, whilst our transactional focus means that we are very agile.

We understand that tax problems can be commercially restricting and anxiety provoking, but we offer a premium service to clients which ensures that they achieve peace of mind promptly.

Our clients need a quick, clear, and reliable service without execution risk and with the sector expertise to propose commercially workable insurance solutions – our Team are experts in providing tax insurance solutions for Institutions & Funds, in an M&A context, or to individuals for Personal Tax. Our global network of top-tier tax advisers are highly responsive and know what is required to provide a seamless tax insurance solution.

See About Us for more information.

What are the typical tax liability insurance policy exclusions?

Tax liability insurance will, as a result of exclusions, not typically offer cover for:

inaccurate representations

In order to underwrite the legal position we rely on certain facts as represented to us in the policy (unless these can be sufficiently evidenced).

change in law

We are unable to underwrite a future change in law which affects the position insured. However, in limited circumstances it may be possible to offer a policy insuring against a specific change.

implementation failure

As it is within the control of the policyholder, we do not underwrite the implementation of a transaction or tax administration (e.g. failure to follow filing or disclosure requirements).

deliberate non-compliance with certain conduct provisions

This mainly protects against moral hazard. For example, if an insured wilfully triggers or increases the risk then we do not offer cover.


We cannot offer insurance to the extent arising from fraud, tax evasion or intentional unlawful behaviour.

What risks cannot be insured with tax liability insurance?

Tax insurance can be used to cover any type of tax risk. However, we will not offer insurance in the following contexts:

where we do not consider the risk of a successful tax authority challenge to be ‘low’

These are outside of our risk appetite. Some other insurers will offer cover for such risks at a commensurately higher premium than we typically charge.

manifestly incorrect or indefensible tax positions

If the tax position to be insured relates to an as yet unchallenged liability or where there is insufficient information to defend a position then we cannot offer cover.

penalties arising from non-filing

We are not able to offer cover for errors in tax administration.

the relevant jurisdiction does not apply the rule of law or has an unstable court system

We require a level of legal stability in order to get comfortable.

moral hazard

If the intention for seeking a policy is to facilitate behaviour by the insured person that increases the risk then we cannot offer cover.

intentional tax avoidance/evasion or marketed schemes

We are not willing/able to cover these.

Unlike some insurers we will insure risks arising in the future or arising on an ongoing basis.

Please see our Risk Appetite for further information about what cover we can and cannot offer.


Brockwell can offer tax insurance cover for any financial loss stemming from a tax event (some insurers are restricted in what they can offer). This typically includes: (1) tax suffered, (2) the costs of defending a position once an assessment has been raised, (3) interest chargeable on unpaid tax, (4) penalties chargeable, and (5) gross-up for tax suffered on receipt of insurance proceeds. However, we can cover other financial loss like pension contributions linked to an employment taxes risk.

We often find that people seeking insurance are not aware of the scope of financial cover that we can offer and so it is important to consider more than the underlying tax to ensure that the policy provides full cover.

Certain tax authorities may require that tax is paid or a guarantee given in order to challenge an assessment (‘advanced tax payment’). On a case-by-case basis we can offer cover in this respect in order to protect a policyholder against a cashflow impact.

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 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.

This will depend on the context, but tax risks are often quite complex and so it can be beneficial to get in touch with us or your broker once a risk is identified. Particularly where a matter is time sensitive it is best to seek quotes for insurance as early as possible.

If a risk will arise in the future (e.g. because a transaction or supply has not yet happened) it is helpful to involve us before the activity commences where possible.

Please see Process for more information or visit Quotes to seek terms of insurance.

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.

Typically the policyholder pays the premium, but this can be subject to commercial negotiation between relevant parties. For example, to avoid an indemnity a seller may pay for a buyer’s tax liability insurance policy.

A tax policy will typically include a retention (or excess) in respect of the costs of defending a tax assessment (if defence costs are covered). Otherwise the retention will be nil.

We can offer a seven-year policy period.

Please see Process for more information or visit Quotes to seek terms of insurance.

Geographically, our primary markets are the United Kingdom, the Nordics, and Australasia, but we also regularly insure risks in Northern Europe and CEE & the Baltics. We do not underwrite pure USA market deals, although we will underwrite a target business that has operations in the USA.

We are very experienced with tax risks relating to M&A transactions or relating to Institutions & Funds. As a result of this experience, we have also developed a Personal Tax offering to assist management teams and fund managers and Richard Taylor-Whiteway is ‘Top Recommended’ in the Spear’s 500 index of insurance advisers to high-net-worth individuals.

We do not offer insurance for transactions/arrangements that are reportable under the UK’s disclosure of tax avoidance schemes (DOTAS) regime or its equivalents in other jurisdictions.

We will consider transactions/arrangements which are reportable pursuant to domestic legislation (e.g. as implemented following the EU Council Directive 2011/16 (DAC6)) provided that the relevant transaction/arrangement (i) does not constitute aggressive tax avoidance, (ii) has a commercial purpose, and (iii) is in the spirit of the relevant law (i.e. is not exploiting an unintended legal loophole).

Yes. At Brockwell we have developed a transfer pricing product (also known as ‘benchmarking insurance’) which offers protection against losses suffered where the arm’s length pricing of a transaction that is supported by a benchmarking study is challenged by a tax authority.

It is fundamental that a benchmarking study has been prepared and the purpose of benchmarking insurance is to support the pricing range proposed by a study. That is, benchmarking insurance cannot be used as an alternative to a benchmarking study, but it can offer commercial certainty alongside such a study.

Our principle appetite is in respect of the pricing of interest on shareholder debt.

We do not currently offer insurance in respect of USA tax risks. If a risk is not subject to challenge by the IRS but the beneficiary of the policy is a USA person then we can consider a solution. We are particularly experienced with offering structures for USA asset managers making inbound European investments.

Beazley will be primarily responsible for claims handling. They are a highly regarded insurer and have an award-winning claims team that has dedicated claims handlers for transactional insurance risk. Beazley specialise in dealing with complex, multi-jurisdictional matters.

The senior underwriter assigned to your transaction will assist with each step of the claims process.

See Claims for more information.

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