Tax Liability Insurance

Tax Liability Insurance (TLI) policies are an effective tool to transfer a potential tax exposure from a business to the insurance industry, whether it has been identified as part of an M&A process or general business operations. Transferring this risk means that the business can completely remove the potential financial exposure from its balance sheet.

What does TLI cover

  • The estimated quantum of the tax liability exposure (cost effective solution for tax exposures from USD1m up to USD 1bn+).
  • Potential interest and penalties imposed by a tax authority.
  • Costs of defending the claim, from responding to the initial enquiry up to litigation (subject to the policy excess).
  • Gross up if required by local tax law.
  • Policy period is typically 7 years (however can be up to 10 years).

What TLI won’t cover

  • Tax planning that is notifiable to a tax authority.
  • A particular type of tax planning that is subject to an ongoing challenge by a tax authority.
  • Jurisdictions that are perceived to have a challenging rule of law.

Benefits of TLI

Buying a business

  • Provides a solution where due diligence flags a potential tax exposure
  • Enhances a bid in an auction process
  • When buying a distressed business or asset, provides protection where the administrator / liquidator is not able to provide any

Managing operational tax risks

  • Mitigates the need to make a provision for an identified tax risk on a company’s balance sheet
  • Renewable tax policies available annually to provide for technical ongoing risks i.e. transfer pricing or substance issues
  • Manages one-off risks that arise from intragroup reorganisations

Selling a business

  • Provides a solution to a potential tax exposure in advance of selling a business
  • Avoids the need to provide an escrow or an indemnity
  • Provides financial certainty on the availability of tax efficient disposals / winding up a business

Winding up a fund/
distributing trust assets

  • Allows a fund to wind up and distribute assets even where there maybe a tail of liability
  • Trustees can distribute proceeds / assets to beneficiaries

Pricing will vary considerably depending on the jurisdiction and the nature of the risk. We would typically expect to see the premium for majority of risks fall within 2% – 6% of the limit sought.

The BMS team has dedicated in house tax counsel that will work with our clients and their advisers to ensure that a bespoke insurance solution is acquired, wherever in the world it is needed.

Recent Videos

Lee Sandra

Sandra Lee

CEO, Asia

M: +852 9255-7088
More Info / Email Me

De Lange Martijn

Martijn de Lange

Managing Director

M: +852 9772-9951
More Info / Email Me

Wong Aris

Aris Wong

Managing Director

T: +65 6230-7987
M: +65 8321-6236
More Info / Email Me

Xi Jessica 1200x1200

Jessica Xi

Senior Associate

T: +852 3579 5490
More Info / Email Me

Heng Ryan 1200x1200

Ryan Heng

Senior Associate

T: +65 8792 6334
More Info / Email Me

Yongtak Lee

Yongtak Lee

CEO & Managing Director

T: +82 2-723-1800
M: +82 10-3110-2807
More Info / Email Me

Kim Tamara

Tamara Kim

Chief Legal Officer & Senior Director

M: +82 10-7365-4628
More Info / Email Me

Kim Kaylee 1200x1200

Kaylee Kim


M: +82 10-7106-1709
More Info / Email Me


138 Market Street #05-01,
Singapore 048946

T: +65 6230-7980

Hong Kong

4/F, Lee Garden Three,
1 Sunning Road,
Causeway Bay, Hong Kong


#1908 19Fl., S Tower Bldg.,
82 Saemunan-ro, Jongno-gu,
Seoul, South Korea

T: +82 2-723-1800

Pawar Tan

Tan Pawar

Head of Private Equity and M&A

T: +44 (0)20-7480-0264
M: +44 (0)7341-133-007
More Info / Email Me

Andrews Dean

Dean Andrews

Head of Tax Liability Insurance

T: +44 (0)20-7480-0308
M: +44 (0)7876-815-643
More Info / Email Me

Wallace Sophie

Sophie Wallace

Divisional Director

T: +44 (0)20-7480-0378
M: +44 (0)7824-605-613
More Info / Email Me

Leitch Harry

Harry Leitch

Director, Head of Deal Origination

T: +44 (0)20-7480-0346
M: +44 (0)7770-990-368
More Info / Email Me

Kemp Simon

Simon Kemp

Group General Counsel

T: +44 (0)20-7480-7288
M: +44 (0)7825-844-988
More Info / Email Me

Christie Marcus

Marcus Christie

M&A Insurance Analyst

T: +44 (0)20-7374-5937
M: +44 (0)7826-532-908
More Info / Email Me

Simon stephan

Stephan Simon

Head of W&I Insurance – UK

M: +44(0)7785-720-944
More Info / Email Me


One America Square
London EC3N 2LS
United Kingdom

T: +44 (0)20-7480-7288

Stone Jason

Jason Stone

Managing Director – Canada

M: +1 416-845-4572
More Info / Email Me

Allen logan

Logan Allen


M: +1 416-722-8171
More Info / Email Me

Godden Andrew

Andrew Godden

Chief Executive Officer - Australia

T: +61 (2) 9165-3502
M: +61 (0) 432-805-729
Email Me

Davies Stuart

Stuart Davies


T: +61 (2) 9165-3511
M: +61 (0) 413-173-975
Email Me

Default Avatar

Samantha Ford

Principal Broker – Australia

T: +61 (2) 9165-3510
M: +61 (0) 422-868-337
Email Me

Default Avatar

Kirsty Kennell-Webb

Principal Broker – Australia

M: +61 (0) 407-467-571
Email Me


Level 3,
222 Clarence Street,
Sydney NSW 2000

T: +61 (2) 9165-3500

Claro Fernando

Fernando Claro

Chief Executive Officer, Iberia

T: +34 91-419-76-30
Email Me


c/ Serrano, 240. Planta 5
28016 Madrid

T: +34 91-419-76-40

Astorqui Jose

Jose H. Astorqui

CCO, Latin America & Caribbean

T: +1 786-581-1899
Email Me

Miami (US)

800 Brickell Avenue
Suite 350, Miami, Florida 33131

T: +1 786-581-1896