Insurance Contracts and Obligations under the Turkish Commercial Code

Insurance plays a critical role in managing business risks and ensuring financial security. The Turkish Commercial Code (TCC) governs insurance contracts, defining the rights and obligations of both insurers and policyholders. This article provides an overview of the essential legal aspects of insurance contracts under the TCC, recent amendments, and the obligations that arise for all parties involved.

• Property Insurance: Covers losses to property due to fire, theft, or other hazards.
• Liability Insurance: Protects businesses and individuals from legal liabilities to third parties.
• Life Insurance: Provides financial protection in the event of the policyholder's death or disability.

• Insurable Interest: The policyholder must have a financial interest in the insured item or person, ensuring that they would suffer a loss if the insured risk occurs.
• Premium Payment: The insured is required to pay premiums, either as a lump sum or in installments, as agreed in the contract.
• Obligation to Disclose Information: The policyholder must disclose all relevant information about the insured risk. Failure to disclose material facts can void the contract.

• Indemnification: The insurer is required to compensate the insured for losses covered under the policy, up to the policy limits.
• Duty to Defend: In liability insurance, the insurer may also be required to defend the insured in legal proceedings related to the insured event.
• Claims Processing: The insurer must process claims in a timely manner and cannot unduly delay payment once a claim is verified.

• Premium Payment: The policyholder must pay the agreed premiums on time. Non-payment can result in the suspension or cancellation of the policy.
• Prevention of Loss: The insured must take reasonable steps to prevent loss or minimize damage once an insured event occurs.
• Disclosure: The policyholder has a duty to disclose any material changes in the insured risk during the policy period, which may affect the premium or coverage.

• With the rise of digital platforms, insurance companies can now issue digital insurance policies, making it easier for consumers to purchase and manage insurance online. The TCC has adapted to recognize electronic signatures and digital contracts as legally binding.

• The Insurance Law and TCC now offer additional protections to consumers, ensuring that policy terms are clear, transparent, and do not contain hidden fees or unreasonable exclusions.

• Either party may terminate an insurance contract before its expiry, but certain conditions apply. For instance, non-payment of premiums or significant changes to the risk may justify cancellation.

• Disputes over insurance claims can be resolved through arbitration or litigation. The insured may also appeal to the Insurance Arbitration Commission, which provides a faster, less costly alternative to court proceedings.

Insurance contracts under the Turkish Commercial Code provide a structured framework to manage risks and liabilities for both individuals and businesses. The obligations of both insurers and policyholders are clearly defined to ensure transparency and fairness. Recent developments in digital insurance and consumer protection laws have further enhanced the regulatory landscape, making insurance contracts more accessible and secure.