Most businesses understand the idea of insuring against fire, theft, cyber attacks or professional negligence.
Increasingly, the answer is yes - at least in part.
A specialist insurance market has developed around tax risks, ranging from relatively familiar tax-enquiry fee protection through to sophisticated policies designed to cover specific tax liabilities arising in transactions.
The latest example is Transfer Pricing Insurance, launched by REVO Insurance in October 2026 for multinational businesses carrying out recurring intra-group transactions. REVO says the product is intended to protect businesses against the uncertainty created when tax authorities take a different view of the appropriate transfer price.
That raises a broader question:
Tax investigation insurance
The product most businesses are likely to encounter is tax investigation or fee-protection insurance.
This generally does not insure the tax itself.
Instead, it can cover professional fees incurred in dealing with an HMRC enquiry or dispute - for example, the additional accountancy or tax-advisory costs required to respond to information requests and argue the taxpayer’s position.
This can be valuable because even where a business has done nothing wrong, responding to a detailed HMRC enquiry can consume considerable professional time.
Policies vary materially, however, and exclusions can be important. Fraud investigations, deliberate inaccuracies, late returns and certain tax-avoidance arrangements may fall outside cover.
There can also be tax consequences to consider. HMRC’s guidance says deductibility of fee-protection premiums depends on whether the underlying professional costs themselves would have been deductible.
Insuring an identified tax risk
At the more specialist end of the market sits tax liability insurance.
This is often associated with corporate transactions.
Suppose a business is being sold and due diligence identifies an uncertain historic tax treatment.
The seller believes the treatment is correct. The purchaser is less comfortable and wants protection in case HMRC subsequently disagrees.
Traditionally that might be dealt with through:
In some circumstances, insurance provides another option.
A specialist insurer can assess the underlying tax analysis and, if comfortable with the risk, insure against an adverse outcome.
That can help bridge the gap between buyer and seller and allow a transaction to proceed without one party retaining an uncertain liability for many years.
REVO’s new Transfer Pricing Insurance takes this concept into another area.
Transfer pricing governs the prices charged between companies within the same international group. Different tax authorities can sometimes take different views about whether those prices reflect appropriate arm’s-length terms.
REVO says its new product is aimed at multinational businesses - including SMEs - undertaking recurring intra-group transactions. It can provide cover for additional tax liabilities arising following a transfer-pricing assessment, together with certain associated defence and advisory costs.
The significance is perhaps less the individual product and more the direction of travel.
Insurance markets are increasingly looking at specific financial and tax uncertainties as insurable risks.
None of this means businesses can simply insure poor tax compliance.
Specialist tax insurers will normally undertake their own underwriting and will want to understand the technical tax position, documentation, professional advice obtained and likelihood of challenge.
Where the underlying position is weak or deliberately aggressive, insurance may simply not be available.
The better way to think about tax insurance is therefore as another risk-management tool.
Good tax advice establishes the correct position.
Good documentation supports that position.
Insurance can sometimes deal with the remaining uncertainty.
For accountants, tax advisers and corporate-finance professionals, tax insurance can sometimes provide another way of solving a problem that might otherwise delay a transaction or leave a client carrying an uncomfortable contingent liability.
For insurance brokers, it represents a developing specialist market where understanding the client’s tax and commercial circumstances is likely to be as important as understanding conventional insurance placement.
That means there is potentially an important role for collaboration between the two professions.
The accountant identifies and explains the tax risk.
The broker accesses the specialist insurance market.
The insurer decides whether that uncertainty can be priced and transferred.
Insurance increasingly extends beyond traditional physical risks.
Cyber insurance has developed rapidly. Warranty and indemnity insurance is now commonplace in M&A. Contingent-risk products are increasingly sophisticated.
Tax risk is following the same path.
Sometimes - but it depends very much on what risk you are actually trying to insure.
And as insurers develop more specialist products, businesses may increasingly find that risks previously dealt with solely through provisions, indemnities or contractual negotiation can also be transferred into the insurance market.
At SWLA Accounting, we work with insurance businesses and owner-managed companies on tax, accounting, transactions and financial management. Understanding where those disciplines increasingly overlap is becoming an important part of modern business advice.