What Is Employer’s Liability Insurance in Turkey and What Does It Cover?
Employer’s liability insurance — officially employer’s financial liability insurance (işveren mali mesuliyet sigortası) — protects you against compensation obligations towards your employees and their beneficiaries arising from a work accident or occupational disease at your workplace.
The cover provided by SGK (Turkish social security) does not pay all the costs and compensation claims that follow a work accident. If the employer is found at fault, SGK claims back what it paid, and the employee or their family may file high-value compensation lawsuits. This guide explains how employer’s liability insurance covers these risks, its extras, exclusions and what determines the price.
- It covers compensation demanded from the employer and SGK recourse claims after work accidents and occupational diseases.
- Court and legal costs during the lawsuit are also within the policy limits.
- Transport by company shuttle, assignments elsewhere, accidents abroad and non-material damages are added as extras.
- It is not compulsory, but a single work accident can shake a small business’s budget.
Contents
1. What Is Employer’s Liability Insurance?
Employer’s liability insurance protects your business’s finances in legal proceedings arising from work accidents and transfers the compensation risk to the insurer. Even if you take every precaution for a safe workplace, no one can know in advance when an accident will happen or how serious it will be.
| Cost | Without insurance | With insurance |
|---|---|---|
| SGK payments to the employee | If the employer is at fault, SGK claims them back (recourse) | The recourse claim is covered within the policy limits |
| Compensation claim by the employee or family | The employer pays | Covered within the policy limits |
| Court and legal costs | The employer pays | Covered within the policy limits |
Why do I need it if my employees have SGK?
SGK pays an injured employee for treatment, temporary incapacity and pensions. But if the employer is at fault, SGK claims these payments back from the employer; this is called recourse (rücu). In addition, the employee — or the family of an employee who died — can sue the employer separately for losses SGK does not cover. Employer’s liability insurance takes on exactly these two burdens.
What does the policy pay for?
- Material compensation demanded from the employer (and non-material compensation if the extra is included)
- Recourse claims brought by SGK against the employer
- Court costs and lawyers’ fees related to the lawsuit
Payments are made up to the limit written in the policy, so it is important to set a limit that matches your business’s risk.
2. Employer’s Liability Insurance Covers
Covers are set by the General Conditions for Employer’s Liability Insurance. Main covers are in every policy; some risks are added through optional extras.
What are the main covers?
- Compensation claimed by employees of the employer who are covered by SGK, and by their beneficiaries
- Compensation claims beyond SGK benefits
- Amounts payable and lawyers’ fees following recourse lawsuits filed against the employer because of work accidents
Which extras can be added?
- Accidents while employees are taken to and from work together in a shuttle vehicle provided by the employer
- Accidents when employees are sent to a place other than their main workplace
- Work accidents outside Turkey
- Claims arising from occupational diseases
- Claims for non-material (moral) damages
These extras are especially important for businesses that use staff shuttles or send employees to sites or customers.
How is it different from public liability insurance?
Employer’s liability insurance covers your liability towards your own employees; public liability insurance covers your liability towards outsiders such as customers, visitors and passers-by. Since employees are not third parties, one does not replace the other; most businesses should consider both. Both can be added to business insurance as extras.
3. What Does Employer’s Liability Insurance Not Cover?
Some situations listed in the general conditions are excluded:
Which situations are excluded?
- War, rebellion, uprising, revolution, invasion and resulting military action
- Claims arising from terrorist acts and measures taken to prevent them
- Compensation claims arising from intentional acts
We check the other exclusions in your policy’s special conditions together at the quote stage.
Does the insurance replace occupational safety obligations?
No. Employer’s liability insurance does not remove your duty to take occupational health and safety measures; it only takes on the financial liability when an accident happens. Taking full precautions both reduces accidents and lowers your share of fault.
4. Is It Compulsory, and What Determines the Price?
Employer’s liability insurance is optional, but given the risks it is one of the most sensible protections for most businesses.
Is employer’s liability insurance compulsory?
No, it is entirely up to the employer. But without insurance, the employer pays the full compensation and recourse burden of a work accident; this amount is often far higher than years of premiums. Policies are usually issued for 1 year.
What determines the price?
- The number of employees
- The business activity and services provided
- Whether hazardous products or processes are involved
- How safe the working environment is and the safety measures taken
- The chosen cover limit and extras
An office and a construction site do not carry the same risk, so the price is calculated separately for each business.
5. Frequently Asked Questions About Employer’s Liability Insurance
What is employer’s liability insurance?
Insurance that covers, within the policy limits, your compensation obligations towards employees and their beneficiaries and SGK recourse claims after a work accident or occupational disease.
Is it the same as “işveren mali mesuliyet sigortası”?
Yes. “İşveren mali mesuliyet sigortası” is the official Turkish name; “işveren sorumluluk sigortası” is the common name.
Is employer’s liability insurance compulsory?
No, it is optional. But without it, the employer bears all compensation and recourse costs of a work accident.
What is SGK recourse?
If the employer is at fault for a work accident, SGK claims back from the employer the payments it made to the employee. Employer’s liability insurance covers these claims within its limits.
Is non-material (moral) compensation covered?
Claims for non-material damages can be added to the policy as an extra.
Are accidents in the staff shuttle covered?
Accidents while employees are transported in a shuttle provided by the employer can be covered with an extra.
Does this insurance pay if my customers are injured?
No. Damage to customers and visitors is covered by public liability insurance.
What determines the price?
Number of employees, business activity, level of hazard, safety measures, cover limit and extras.
Cover limits, extras and price vary by number of employees, line of business and insurer. This page is for general information; contact us for a quote for your business.
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