It’s essential to ensure valuable things: your home, your car, even your life. Have you ever thought about insuring parts of your business? Specifically, when it comes to taxes? Here are some things to think about when it comes to tax liability insurance and how Hauser Insurance can help your business navigate complex tax liability insurance.
Tax Liability Insurance
TOL, or tax liability insurance, is a form of insurance that safeguards taxpayers against the collapse of a tax position in association with an accounting treatment, transaction, reorganization or any type of taxable event. To sum it up, tax liability insurance covers losses that come from state, federal, local or foreign tax treatments.
Addressing Financial Risks
Mergers and acquisitions, also known as M&A, are a standard business practice in the United States. It is a big transition of business, meaning the financial risks are elevated. Fortunately, that’s where tax liability insurance can help. This form of insurance protects any form of mergers and acquisitions against the financial burden of a known tax risk arising in a transaction or restructuring. Tax liability insurance eliminates uncertainty when tax authority articles, tax laws and precedents are untransparent on a particular tax issue. According to the liability experts at Hauser Insurance, tax risks that can be insured include:
- R&D claims
- Withholding taxes
- Availability of losses
- Goods and services tax
- Transfer pricing
- Taxation of gains on disposal
Beyond Mergers and Acquisitions
Tax liability insurance is not used exclusively for mergers and acquisitions. While this form of business is the most commonly insured by this policy, tax liability insurance is available for business-as-usual tax risks derived from corporate groups, such as historical tax positions embraced or risks correlated with debt restructuring or recommended reorganizations. Tax liability insurance can be sought after depending on if there is a tax risk present. The context of the tax risk does not matter as much; however, it matters that there is a tax risk that needs to be addressed.
How Hauser Insurance Can Help
A tax liability insurance policy, when well crafted, can be well-positioned to execute the closing of a merger or acquisition — M&A for short. Overall, this will help you and your business be smart about the decisions that you make. Uncertain about how to navigate a tax liability insurance policy? Hauser Insurance has the tools businesses need to expertly navigate this complex realm. Contact Hauser today by filling out the quick contact form on our website.