What Is Electronic Equipment Insurance?

What Does Electronic Equipment Insurance Cover?

Electronic Equipment Insurance (EEI) — elektronik cihaz sigortası in Turkish — protects the electronic machinery, equipment and data processing systems set out in the schedule attached to the policy against sudden and unforeseen damage from any cause not previously known, once the equipment has passed its test period. Cover extends to cleaning, maintenance, overhaul and relocation within the same premises, and to idle periods.

Article 1 of the general conditions, in force since 15 January 1989, names nine causes and the list is one of the widest in the engineering class: negligence, error or sabotage by staff or third parties; theft or attempted theft at the insured premises; faulty design and material; short circuit, overvoltage and induction current; fire, lightning, explosion and the firefighting and salvage they cause; scorching, darkening, smoke and soot; storm, flood, landslip and subsidence, but not earthquake; and water, damp and corrosion. A ninth clause keeps it open.

Which Devices Go on the Schedule?

The wording limits cover to the property listed on the attached schedule — an integral part of the policy — by type, number, year of manufacture, specification and sum insured. That schedule is the boundary of the cover: a device not on it is not insured.

• Servers, storage units, network hardware and data processing systems
• Medical imaging and diagnostic devices, and laboratory measurement equipment
• Quality control, test and calibration instruments
• Communication systems, radio equipment and switchboards
• Security and camera systems and access control units
• Audio, video and stage technology equipment
• Electronic command and control units belonging to machines

How It Differs From Machinery Breakdown Insurance

The last item sits on the border between the two branches. The frame of a machine tool and its electronic control unit belong to the same machine, yet can appear on different policy schedules — and at the moment of a claim what decides the outcome is which schedule the item appears on.

Buy-Back Options and Absolute Exclusions

The wording carries two exclusion lists, and reading the policy without that distinction is misleading. Article 2 situations are excluded "unless otherwise agreed", so they can be bought back for additional premium: earthquake; loss to mobile devices away from the insured premises and in transit; physical damage to external data media; increased cost of working from substitute equipment; express freight and overtime; strike and lockout; valves and tubes; and terrorism. See also where the line runs against transit insurance.

Article 3 exclusions cannot be bought back. Alongside war, nuclear risks and acts of public authority, those specific to electronic equipment are:

• Any loss of profit and any legal liability, from whatever cause
• Wear, tear, decay, rust, corrosion and oxidation from customary use
• Loss for which manufacturers or sellers are liable by law or contract
• Damage from defects existing at inception and known to the insured
• Continued use of damaged property before the damage is repaired
• Adjustment, repair and maintenance costs unrelated to an insured loss
• Damage from exchangeable parts, oils and chemicals — damage they cause to other insured property remains covered
• Cosmetic defects such as scratches on painted surfaces — damage to other property remains covered
• The wilful act and gross negligence of the insured

Is Data Loss Covered by This Policy?

Data is the most misread heading in this policy. The wording treats loss resulting from physical damage to external data media — magnetic disks, tapes, cards and the like, including information recorded on data processing systems — as excluded "unless otherwise agreed". The cover enters the policy only by endorsement.

Even then its limits are defined: what responds is loss tied to physical damage to the medium. Data made unreadable because a disk burned, was crushed or was soaked falls within that frame. Losses without physical damage — a software fault, deletion, ransomware or unauthorised access — belong to a separate cyber cover. The increased cost of working from substitute equipment is likewise available only by endorsement.

Sum Insured, Settlement and the Claims Process

Article 4 sets the sum insured on a new replacement value basis: what the scheduled items would cost new today, including freight, erection, customs duty and taxes. If the new replacement value of a unit at the date of loss exceeds the sum insured, the insured carries the loss in proportion to the shortfall. Because electronic models turn over quickly, the sum insured needs revisiting at every renewal.

Two rules drive the settlement. For repairable damage the new price of the replacement spares is taken, with no deduction because a new part replaced an old one; reusable parts are deducted. For a total loss, depreciation, wear and salvage are deducted from the item's new value at the date of loss. The following claims steps run on a clock:

• Notify the insurer within 5 days of learning of the damage.
• In case of theft, report it to the police immediately and submit the report to the insurer.
• Take salvage and protection measures; apart from unavoidable cases, do not alter the loss site.
• After giving notice of repair, minor repairs may be carried out without waiting.
• If no loss adjuster has been sent within 7 days of notification, repair may begin.
• For theft the indemnity falls due one month after the insurer receives information satisfying it that the claim is genuine.

What We Do as an Agency

Problems in electronic equipment insurance usually come from three places: a device missing from the schedule, a sum insured below new replacement value, and an endorsement that was needed but never bought. All three are solved when the policy is set up, never at the moment of a claim.

The general conditions are identical for every insurer in Türkiye; Article 11 of Insurance Law No. 5684 requires the main content of insurance contracts to follow approved general conditions applied in the same way by all companies. The real difference between quotations lies in the accuracy of the schedule, the sum insured, the deductible and the endorsements chosen. Where mechanical equipment sits alongside the electronics, assess it with machinery breakdown insurance, and buildings with a commercial property policy.

RYL Sigorta Aracılık Hizmetleri is an insurance agency. We prepare quotations from the insurance companies we act for and follow through on getting the schedule and the sums insured right. The policy is issued by the insurance company, and the indemnity is paid by the insurance company. See our engineering insurance page or the quotation form.

Frequently Asked Questions

Sources

• Electronic Equipment Insurance General Conditions, in force since 15 January 1989 (TSB)
• Machinery Breakdown Insurance General Conditions (TSB)
• SEDDK — index of insurance general conditions
• Insurance Law No. 5684 (mevzuat.gov.tr)

This article is for information only; the scope of cover is set by the policy’s specific and general terms.