Tax Liability Insurance can address the various business transactions that are inevitably part of a complex M&A deal. All of these transactions—the purchase, sale, and sub-leasing of assets often require the use of multiple tax exemptions (i.e., tax depreciation) and tax deductions. These exemptions are unique to the business transaction and require careful consideration before the transaction is executed, even before taking the company public.
It is vitally essential for the Company to consider the Tax Liability Insurance requirements to ensure that it is not subject to a tax liability or any adverse tax implications if the transaction fails. Many business owners don’t know that they should have tax liability insurance coverage. The purchase of a company often does not warrant tax liability insurance coverage because the purchase price was below the transaction tax threshold. For example, consider purchasing a business subject to less than $20 million in transaction taxes for the current year.
In most cases, having tax liability insurance coverage is an essential component of the purchase transaction due diligence process. Tax liability insurance is vital for any transaction involving a transfer of interest in a business. A third party is purchasing interest, and the seller is liable to pay tax. In addition, since most businesses require insurance to have adequate protection.
Hauser Insurance tax liability insurance is designed to provide significant tax savings when business transactions require capital-intensive equity financing. This is particularly relevant to larger M&A transactions involving the acquisition of public companies and acquisition of non-publicly-traded companies, as well as general corporate acquisitions. The variety of tax-related exposures impacting acquisition transactions can be overwhelming for business managers with complex tax structures, especially since a deal-by-deal analysis is often needed before capital is raised.
Hauser Insurance’s application of carefully selected and customized coverages and coverage exclusions allow for the certainty of tax liability coverage while providing us with the freedom to customize coverage based on client needs. In addition, Hauser Insurance offers products that ensure an organization’s tax liability is indemnified for all tax exposures or obligations regardless of whether or not the matters involve a loss. In other words, Hauser Insurance takes care of the tax exposure issues related to a merger or acquisition, regardless of the nature or scope of any potential losses.