Aviation Insurance and Recourse in Türkiye

Insurance in aviation law is not merely an obligation of commercial prudence, but a prerequisite for flight operations and, at the same time, the medium through which the liability regime of internationally unified law is economically implemented. For airlines, ground-handling companies and their insurers, the Turkish market deserves particular attention: it combines one of the largest traffic fleets in Europe with a compulsory insurance regime that closely follows European requirements and with court practice that gives the insurer’s recourse considerable practical importance. This article examines the legal basis of aviation insurance under Turkish law, the scope of statutory insurance obligations, the treatment of war and terrorism risks, the structure of the claims process and the requirements and limits of insurer recourse before Turkish courts.

Table of contents

• On what legal bases is aviation insurance in Türkiye founded?
• What insurance obligations are established by Turkish law?
• How is the insurance programme structured in practice?
• What special rules apply to war and terrorism risks?
• What procedures and time limits apply in the event of a loss?
• Under what conditions can insurer recourse succeed?
• What procedural particularities shape proceedings in Türkiye?
• Conclusion

On what legal bases is aviation insurance in Türkiye founded?

This area of law is constituted by three interlocking layers of rules. The outer framework is formed by internationally unified law: for international carriage, the Montreal Convention of 1999, which has been ratified by Türkiye, determines the liability of the air carrier towards passengers and in connection with the carriage of baggage and cargo and obliges the contracting states, in Article 50, to ensure that their air carriers maintain adequate insurance cover for their liability risks. The liability limits under the Convention were increased as of 28 December 2024 as part of the adjustment under Article 24; for cargo damage, an amount of 26 Special Drawing Rights (SDR) per kilogram now applies instead of the previous 22 SDR. For domestic carriage within Türkiye, Article 106 of the Civil Aviation Law No. 2920 (TSHK) provides that, insofar as the law itself contains no provision, the international conventions ratified by Türkiye shall apply by analogy; the liability regime of internationally unified law thus extends into national aviation transport. The second layer consists of the national compulsory insurance regime under Articles 132 et seq. TSHK together with implementing regulations, compliance with which is monitored by the Turkish civil aviation authority (SHGM) as a prerequisite for commencing operations. The third layer is the general insurance contract law under Articles 1401 et seq. of the Turkish Commercial Code No. 6102 (TTK), under the supervision of the Turkish insurance authority (SEDDK); this includes, in particular, pre-contractual disclosure obligations, obligations in the event of an insured event and the statutory transfer of claims under Article 1472 TTK. These three layers are overlaid by the practice of the international insurance market: Turkish aviation risks are frequently insured on the basis of internationally used clauses of the London insurance market and are internationally reinsured. As a result, coverage disputes often have to be assessed at the intersection of Turkish insurance law and English-language insurance terms.

What insurance obligations are established by Turkish law?

The TSHK establishes two central compulsory covers. Under Article 132 TSHK, air carriers operating in domestic and international transport must maintain liability insurance covering their liability arising from the contract of carriage towards passengers and in connection with the carriage of baggage and cargo; in substance, this is an insurance-law safeguard for liability under the Montreal Convention, the minimum scope of which accordingly follows the Convention’s liability limits, most recently increased in 2024. Breach of the insurance obligation is subject to strict sanctions: Article 133 TSHK prohibits flight operations without the prescribed cover and authorises the authority to ground aircraft without valid proof of insurance. In addition, there is coverage for strict liability towards third parties: for damage caused to persons or property outside the aircraft, the operator is liable regardless of fault under Article 134 TSHK; Article 138 TSHK requires both Turkish and foreign operators to maintain insurance for this liability, the details of which are regulated by the 2017 Regulation on Liability Insurance of Civil Aircraft towards Third Parties issued on this basis. Following the system of Regulation (EC) No. 785/2004, this Regulation scales the minimum coverage amounts according to the maximum take-off weight of the aircraft in Special Drawing Rights and expressly extends the insurance obligation to war and terrorism risks. Insurance obligations also exist for commercially operated unmanned aircraft and — through operating permits and contractual arrangements — for ground handlers and other service providers in the aviation chain.

Law No. 4911 of 2003 on the state guarantee for non-commercially insurable third-party liability risks of civil aircraft occupies a special position. It authorises the state to cover, by way of a state guarantee, that part of third-party liability which is not insurable on the commercial market. The historical trigger — the collapse of the war-risk insurance market after the attacks of 11 September 2001 — at the same time illustrates the continuing function of the provision: it keeps a fallback mechanism available for future market disruptions, without which flight operations would come to a standstill for lack of the prescribed cover.

How is the insurance programme structured in practice?

Beyond the statutory minimum covers, the insurance programme of an airline follows the international market standard. At its core are hull insurance for the aircraft (Hull All Risks) together with separate war hull cover, covers for spare parts and engines, as well as liability programmes with combined single limits for passenger, cargo and third-party damage; depending on the business model, cover for business interruption and loss of licence of flight personnel may also be added. For ground-handling companies, risks of liability for property in their custody are particularly prominent, since damage to third-party aircraft during handling — so-called ramp damage — is among the most loss-intensive risks of airport operations. For maintenance and repair organisations, product-related liability risks also arise. Finally, the financing and leasing structures of the fleet have a significant shaping effect: lessors and financing banks require their inclusion as additional insureds and loss payees as well as the usual market-standard endorsements to preserve the continuity of cover, compliance with which must be demonstrated at each policy renewal. Since the Turkish traffic fleet is very largely leased, aligning insurance cover with the insurance obligations under leasing agreements is one of the ongoing tasks of risk management.

What special rules apply to war and terrorism risks?

War, terrorism and related perils are excluded from standard hull and liability covers under market-standard wording and are bought back through separate war-risk covers with their own premiums and limits. These covers may provide for short cancellation and adjustment periods, enabling insurers to react at short notice to changed risk situations. For aviation companies operating in Türkiye, this flexibility is of particular practical importance in view of the geopolitical situation of the region. For the companies concerned, this results in a dual monitoring task: on the one hand, the scope and exclusion clauses of the war-risk cover must be continuously compared with the actual route structure; on the other hand, the minimum covers owed to lessors must be maintained even in the event of short-term market changes. Attention must also be paid to the sanctions-law overlay of insurance cover through sanctions clauses commonly used in today’s market, the scope of which requires careful examination in the event of a loss. If the commercial market fails across the board, Law No. 4911 opens the state guarantee route described above.

What procedures and time limits apply in the event of a loss?

Following a loss event in Türkiye, several procedural regimes operate side by side, and their purposes must be strictly distinguished: the safety investigation serving solely to prevent accidents under the Turkish Regulation on the Investigation and Examination of Accidents and Serious Incidents of Aircraft (HKY-13), which implements ICAO Annex 13, where applicable the criminal investigation procedure, and the civil-law handling of claims; the separate article on aircraft accidents deals with the details of this coexistence. From an insurance-law perspective, three groups of time limits should be highlighted. First, the contractual and statutory notification obligations towards the insurer, breach of which may lead to a reduction or loss of the coverage claim under Article 1446 TTK. Secondly, the complaint periods under Article 31 of the Montreal Convention, according to which damage to baggage must be notified in writing within seven days, damage to cargo within fourteen days after receipt, and damage caused by delay within twenty-one days; failure to submit a timely complaint excludes actions against the air carrier, subject to fraudulent conduct. Thirdly, the two-year period under Article 35 of the Convention, which according to the prevailing Turkish understanding is to be qualified as an exclusion period and is neither suspended nor interrupted; settlement negotiations therefore do not preserve the time limit. In addition to inspection by experts, evidentiary purposes are served in particular by the procedure for securing evidence under Articles 400 et seq. of the Code of Civil Procedure (HMK), by which the condition and cause of damage can be judicially established before evidence is lost.

Under what conditions can insurer recourse succeed?

Upon payment of the indemnity, the insured’s compensation claims pass to the insurer by operation of law under Article 1472 para. 1 TTK. The transfer of the claim does not require an assignment; nevertheless, practice recommends documenting the payment and the transfer of the claim by subrogation documents in order to pre-empt objections to standing. In aviation, potential recourse debtors include, in particular, the air carrier under the Montreal Convention, ground-handling companies for ramp and handling damage, maintenance organisations and, in the case of damage to cargo, freight forwarders and performing sub-carriers in multimodal chains. The success of recourse typically turns on three questions. The first concerns the chain of custody: the claimant must show in whose custody the cargo or aircraft was at the time of the damage — a question that imposes significant evidentiary requirements in division-of-labour handling operations. The second concerns the validity of contractual liability limitations, such as those contained in particular in the IATA Standard Ground Handling Agreements (SGHA); Turkish case law generally recognises such clauses in commercial dealings, but denies them effect under general principles where the damage was caused intentionally or by gross negligence. The third question concerns the breaking of the liability limits of internationally unified law: under Article 22 para. 5 of the Montreal Convention, in the case of damage to cargo the limits cease to apply if the damage resulted from an act or omission committed recklessly and with knowledge that damage would probably result; Turkish courts apply this standard, but — rightly — impose strict requirements for its proof.

What procedural particularities shape proceedings in Türkiye?

Liability and recourse actions arising from aviation fall within the jurisdiction of the commercial courts; in technical matters, their decision-making relies almost without exception on court-appointed expert panels, whose selection and assessment can be effectively influenced by the parties through substantiated evidentiary motions and their own private expert reports. International jurisdiction for claims arising from international carriage is governed by Article 33 of the Montreal Convention; in addition, the jurisdiction and arbitration clauses of handling, maintenance and leasing contracts deserve attention, especially as arbitration — including before the Istanbul Arbitration Centre (ISTAC) — is gaining ground in the aviation sector. Foreign claimants may be required under Article 48 of Law No. 5718 on Private International and Procedural Law to provide security for costs; whether such security must be provided should therefore be examined before filing an action. In practice, however, security for costs is more the exception due to treaty-based exemptions, in particular under the Hague Convention on Civil Procedure or bilateral agreements. Judgments on foreign-currency claims, interest and the recognition and declaration of enforceability of foreign judgments and arbitral awards follow the general rules of Turkish international procedural law. For the recourse strategy, all of this leads to a simple but indispensable consequence: an early timetable for time limits and jurisdiction — from notification obligations through complaint periods to the two-year exclusion period — is not a formality, but a condition for preserving claims.

Conclusion

Aviation insurance under Turkish law is based on the interaction of the Montreal Convention, the compulsory insurance provisions of Articles 132 et seq. TSHK with their minimum covers scaled according to take-off weight, and the insurance contract law of the TTK — overlaid by the wording used in the London market. The authority effectively enforces insurance obligations through the operating prohibition under Article 133 TSHK; Law No. 4911 secures the insurability of war risks in market crises. At the same time, Türkiye proves to be a developed recourse market for insurers: the transfer of claims under Article 1472 TTK, the liability regime of internationally unified law and established case law on liability limitations and their breaking support carefully prepared recourse actions — provided that complaint and exclusion periods are observed and the evidence is secured early.

Airlines and ground handlers are advised to manage coverage concepts, insurance obligations under leasing agreements and claims processes as a unified system and to align the interfaces of their contractual arrangements — liability limitations, insurance clauses and waivers of recourse. Insurers, in turn, secure their recourse position through standardised subrogation documentation, consistent time-limit control and an evidence strategy that is already aligned with later court proceedings at the claims stage.

The aviation law team of GEMS Schindhelm advises airlines, ground-handling companies and aviation insurers on coverage, claims and recourse matters with a Türkiye connection and represents them before Turkish commercial courts and arbitral institutions as well as in proceedings for the recognition and enforcement of foreign titles.