Tax insurance – A comprehensive and cost effective risk management solution

Published on 26th March 2020

In light of the challenges currently being faced by businesses, and the slowing of M&A activity across the Pacific region, there has been a greater focus by corporate groups and institutional investors on gaining as much financial certainty as possible. Being able to actively control cost and mitigate financial exposures in this difficult environment are critical.

Tax insurance can be used as a strategic risk management tool to protect against exposures arising from the operational tax affairs of corporate groups and internal restructurings, in addition to covering tax risks identified in the context of M&A transactions.

This is particularly important given the inherent uncertainty created by complex areas of tax law, and potential for differing interpretations on how such laws should apply. In this context, some organisations are revisiting their historical tax positions and considering how tax insurance can be used to mitigate specific exposures in the event that the treatment adopted, is challenged by a taxation authority. Being able to actively control cost and gain a degree of certainty is increasingly important for businesses, especially given the challenges they face in the current environment. 

In this report, Kane Sim, Head of Tax – Pacific and Chris McDermott, Pacific Practice Leader for Private Equity and M&A Services (PEMA) unpack how tax insurance can be a comprehensive risk management solution by uncovering:

• Why organisations purchase tax insurance?
• Applications tax insurance is most often used
• The placement process of tax insurance; and
• Coverage, pricing and policy periods

Marsh has extensive experience in helping clients manage all aspects of the insurance process and has a dedicated tax practice to advise on risk management options and help you secure comprehensive and cost effective insurance coverage for potential tax exposures.

For more information on how tax insurance can be used as a strategic risk management tool for your organisation, please download the report or contact Kane Sim.