Liability insurances are regulated under the Articles 1473-1486 of the Turkish Commercial Code numbered 6102 as published in the Turkish Official Gazette published on the date of 14.02.2011 and numbered 27846 (“Turkish Commercial Code”).
Within the framework of a liability insurance, unless provided otherwise in the contract, the insurer shall pay compensation up to the amount stipulated in the insurance contract to the party that has incurred damages due to the liability of the insured specified in the contract and arising from an incident that took place within the term of the insurance, even if such damage arises subsequently.
If the insurance has been provided for the liability of the insured regarding his/her enterprise, unless provided otherwise in the contract, this insurance shall also cover the liability of the agent of the insured as well as those of the persons assigned in the management or supervision of the entire enterprise or a part of it and employed in such enterprise. In such a case, the insurance shall be deemed to have been provided in favor of these persons.
It should also be noted that when a claim is raised against the insured, any reasonable expenses concerning such claim shall be borne by the insurer; the contract should provide for the payment of the expenses that exceed the sum insured. The insurer shall be obliged to make an advance payment for the expenses upon the request of the insured.
However, there are certain obligations for the insured to comply with; The insured shall notify the insurer about any incidents that might require his/her liability. Unless agreed otherwise, the insured shall immediately notify the insurer about any claims raised against him/her. Upon this notification or in case the party that has incurred damages directly applies to the insurer, then the obligation of the insurer to pay compensation will be due in accordance with the procedures.
In case of violation of the obligation to notify;
- If the failure to make or the delay in making the notification regarding the realization of the risk has caused an increase in the compensation amount or the sum insured to be paid, a reduction shall be made in such compensation amount or sum insured depending on the severity of the fault;
- If the insurer has actually become aware of the realization of the risk previously, it may not benefit from the above paragraph.
Within five days following the date of notification, the insurer shall notify the insured whether or not it shall undertake to carry out the necessary legal proceedings, obtain the necessary judgments, and provide assistance in respect of the defense related to the claims of the parties that have incurred damages and on behalf of the insured, by bearing the responsibility and all expenses; however, If the insurer has not made a notification then the insured shall pay the compensation formally determined against him/her. On the other hand, the settlement agreement made by the insured without obtaining the consent of the insurer shall be invalid against the insurer if such consent is not given within fifteen days following the date of notification; the insurer may not abstain from giving such consent based on unjustified grounds.
The insurer shall never be liable for any loss arising from the relevant incident, is such incident is intentionally caused by the insured.
The party that has incurred the loss may claim the compensation of the loss incurred by it up to the amount of the sum insured directly from the insurer, provided that such claim remains within the limitation period effective for the insurance contract.
It should also be noted that Article 1479 of the Turkish Commercial Code regulates that the insurer may require information from the party that has incurred the loss with the aim of determining the event, which caused such loss, and the loss amount. The party incurring the loss shall be obliged to provide the insurer with all the documents, which can be provided and may reasonably be requested. If the party incurring the loss fails to comply with this obligation, the liability of the insurer shall be limited to the amount it should have been obliged to pay if such obligation had been fulfilled, provided that the party incurring the loss is notified about the situation.
The insurer is forbidden to exchange the insurance compensation to be paid by it to the party incurring the loss for its receivables arising from the insurance contract.
As per the subrogation as regulated under 1481 of the Turkish Commercial Code; The insurer shall legally subrogate the insured when it pays the insurance compensation. If the insured has a right of litigation against those responsible for the loss incurred, such right shall be transferred to the insurer to the extent of the sum compensated by it. If an action or proceedings have been initiated against those responsible, the insurer may resume such action or proceedings pursuant to the principle of subrogation by proving the payment made by it to the insured, without the need for the consent of the court or the other party. If the insured or the party that has incurred the loss acts in a way to violate the rights transferred to the insurer pursuant to the first paragraph, s/he shall become liable before the insurer.
Limitation period is regulated under Article 1482 of the Turkish Commercial Code. Accordingly, all claims to be raised against the insurer shall drop due to limitation period after two years following the incident that constitutes the subject matter of the incident.
As the law or regulations may require compulsory liability insurances for specific reasons, for those, insurers may not refrain from providing compulsory insurances that are covered within the scope of the branches in which they operate, provided that the provisions included in other laws are reserved. Moreover, even if the insurer has been completely or partly relieved from its obligation before the insured, its obligation to perform in terms of the party incurring the loss shall continue up to the amount of the compulsory insurance. The termination of the insurance relationship shall become effective after one month following the notification by the insurer to the competent authorities that the contract has or is to be expired. To the extent that the loss is compensated for by social security institutions, the liability of the insurer shall be removed.