What Is Commercial Property Insurance in Türkiye?

What the Cover Actually Protects

Turkish law contains no product called “business insurance”. What the market sells under that name — or as a “KOBİ package”, KOBİ being the Turkish acronym for SME — is a bundle whose core is the Fire Insurance General Conditions, a wording issued by the regulator, with theft, glass breakage and machinery breakdown added on top. The schedule, not the product name, tells you what you own.

Under clause A.1 of the Fire General Conditions the core cover responds to direct material damage caused by fire, lightning, explosion, or by the smoke, steam and heat arising from them, up to the sum insured. “Direct” is load-bearing: consequential loss, such as earnings lost while the business is shut, belongs to a separate cover.

When Cover Becomes Legally Compulsory

No rule obliges a business in general to insure its premises or stock. Compulsion arises from two places: the nature of the building, and the nature of the trade.

For compulsory earthquake cover the test is how the building is used. Article 10 of Law No. 6305 brings in independent units under the Condominium Law No. 634, buildings built as dwellings on registered private land, and the units inside them used as shops or offices; it excludes buildings used entirely for non-residential purposes. So a shop on an apartment block’s ground floor needs DASK — Türkiye’s compulsory earthquake policy — while a free-standing factory relies on a fire policy clause instead.

The classic trade-driven obligation concerns dangerous goods. Clause A.1 of the General Conditions for Compulsory Liability Insurance for Dangerous Substances and Dangerous Waste defines its subject matter by reference to the substances listed in article 2 of Decree No. 2010/190 of 11 March 2010 and the activities involving them. For a fuel station, an LPG dealer or a workshop storing flammables it is not optional. Employer’s and Third Party Liability remain voluntary.

What Sits Inside the Package

The Fire General Conditions sort perils into three buckets: the core cover that needs no mention, perils added by endorsement, and property or costs that stay outside unless a sum insured is stated for them separately.

The row to watch is A.3.2. Flood, storm and snow load require an endorsement, yet fire and explosion caused by those events are covered without one. Declining storm cover forfeits the direct storm damage to the roof, not the fire it started.

Where Fire and Theft Cover Stops

The commonest misreading of fire cover is that anything burnt is paid. Clause A.4 excludes a list of situations outright, and most share one feature: no fire broke out.

Theft cover draws its boundary at the method of entry. Clause A.1 of the Theft General Conditions ties cover to five methods: breaking, drilling, demolishing, forcing or overturning; climbing or scaling; opening the lock with a lost, stolen or forged key or a code; hiding inside after entering secretly; and force, violence or threat. Cover may be granted for only some of them.

• Without a fire breaking out, damage from the property’s own defect, fermentation, roasting or internal deterioration is excluded (Fire GC A.4.4).
• Without a fire breaking out, damage from heat applied for processing, from falling into a hearth, or from contact with irons, lamps and cigarettes is excluded (Fire GC A.4.5).
• Without a fire breaking out, damage to electrical and electronic equipment from short circuit, earthing, voltage fluctuation or induction currents is excluded (Fire GC A.4.6); electronic equipment and machinery breakdown cover close that gap.
• Environmental pollution loss arising from an insured peril is excluded (Fire GC A.3.3.9).
• Theft by the insured’s own employees (Theft GC A.4.5), theft at premises empty for over thirty days (A.4.1) and goods in unconnected showcases (A.3.4) enter cover only by endorsement.
• Inventory shortages (A.5.6) and fire, explosion or water damage caused by thieves (A.5.5) fall outside theft cover.

The Real Cost of an Understated Sum Insured

In business policies the expensive mistake is rarely a missing peril; it is a low sum insured. Under clause A.5, where the sum insured is lower than the value of the insured interest at the time of loss and only part of it is damaged, the insurer is liable only for the proportion the sum insured bears to that value. English practice calls this average.

Concretely: if stock is declared at half its true value and a partial fire occurs, half the assessed loss is paid. The policy is valid and the peril covered; only the declared figure was short. The same clause lets that proportion be bought away against additional premium, while clause A.6 voids any excess sum insured and refunds the premium.

How a Claim Runs

What happens in the first forty-eight hours shapes the outcome as much as the schedule of covers does.

• Notify the insurer within five business days of learning of the loss (Fire GC B.1.1).
• Except where unavoidable, change nothing at the damaged location; clearing debris early makes assessment impossible (Fire GC B.1.4).
• Costs of protective measures are paid even if futile; where the sum insured is short they are scaled by the same proportion (Fire GC B.2).
• The insurer must assess and notify the indemnity within one month of receiving the claim documents (Fire GC B.3).
• If quantum cannot be agreed, assessment goes to hakem-bilirkişi — party-appointed expert arbitrators (Fire GC B.4).

Where We Come In as an Agency

RYL Sigorta Aracılık Hizmetleri Limited Şirketi is an insurance agency. The policy is issued and the claim is paid by the insurance company we place business with; we neither underwrite risk nor settle losses. Our work is to map your exposure, build the schedule around it, review valuations so the sum insured does not fall short, and keep the paperwork moving at claim stage.

The question we hear most is not “which package is broader” but the post-loss one: “why wasn’t this paid?” The answer almost always sits in the schedule or in the declared sum insured. When you renew, put your schedule next to the table above.

Frequently Asked Questions

Sources

• SEDDK — Insurance General Conditions
• Fire Insurance General Conditions (in force 1 January 1993)
• Theft Insurance General Conditions
• Law No. 6305 on Disaster Insurance — DASK
• General Conditions for Compulsory Liability Insurance for Dangerous Substances and Dangerous Waste
• Regulation on Small and Medium-Sized Enterprises (KOSGEB)

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