Scott Harty (pictured), partner in Alston & Bird’s Federal & International Tax Group, explained: “Tax liability insurance transfers a known, but uncertain, tax risk from a company’s balance sheet to an insurance company. It is typically asked for ahead of an M&A transaction by a sophisticated seller and during an M&A transaction by a buyer following due diligence, or by a seller who is being asked to give a specific indemnity.”
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The vast majority of tax liability insurance is purchased in the context of an M&A transaction or