Machinery breakdown caused major losses to your business in Turkey? Learn how companies can claim repair or replacement costs, challenge low insurer valuations and pursue production and business interruption losses.

A sudden machinery breakdown can stop an entire production facility even when only one component fails. A turbine, compressor, CNC machine, industrial press, generator, transformer, production line or other critical equipment may suffer physical damage requiring expensive repairs, while the factory loses production and customer orders during the shutdown. For companies operating in Turkey, the resulting insurance claim can therefore involve two fundamentally different categories of loss: physical machinery damage and financial losses caused by interrupted production. The existence of machinery breakdown insurance does not automatically mean that every production loss is covered. Physical repair or replacement costs are primarily evaluated under the machinery breakdown policy, while lost production, lost turnover or lost profits generally require appropriate business interruption or machinery-breakdown loss-of-profit coverage. For substantial claims in 2026, companies should therefore examine the machinery policy and any associated business interruption protection together.

What Is Machinery Breakdown Insurance?

Machinery breakdown insurance is designed to protect insured machinery against qualifying sudden and unexpected physical damage occurring while the equipment is operating, being maintained, cleaned, moved within the insured premises or otherwise falling within the policy’s coverage framework. The precise scope depends on the policy, insured machinery schedule, general conditions, endorsements and exclusions.

What Types of Machinery Can Be Insured?

Depending on the policy, coverage may involve manufacturing machinery, generators, compressors, boilers, turbines, pumps, refrigeration equipment, printing machinery, textile machinery, CNC systems, industrial presses, production lines and other mechanical or electrical equipment. The machinery schedule is critical because equipment not properly identified within the insured property can generate a coverage dispute.

What Causes Can Potentially Trigger Machinery Breakdown Coverage?

Machinery failures can result from mechanical breakdown, electrical problems, short circuits, operator error, lubrication failures, centrifugal forces, pressure problems, material defects and other sudden internal events. However, whether a particular cause is insured depends on the actual policy.

Sudden and Unexpected Damage Is Usually Central

One of the most important issues is whether the machinery suffered a sudden accidental event or merely deteriorated gradually through normal use. Insurers frequently distinguish accidental breakdown from ordinary wear and tear.

Wear and Tear Is a Common Source of Rejection

Machinery naturally deteriorates over time. Bearings wear, seals deteriorate, components fatigue and surfaces corrode. Insurance should not automatically be treated as a substitute for routine maintenance or replacement of components that have reached the end of their normal service life.

But Wear Does Not Automatically Explain the Entire Breakdown

The presence of an old or worn component does not necessarily establish that all resulting damage is excluded. A worn component may fail suddenly and cause extensive consequential physical damage to other insured parts of the machine. The precise cause and policy wording must therefore be examined.

Example: Bearing Failure Causes Major Damage

A bearing worth TRY 100,000 fails and causes TRY 8 million of damage to a turbine. The insurer may argue that the bearing itself failed through wear and tear. Even if that argument is technically correct, a separate question may arise concerning the resulting accidental damage to other machinery components.

Why Root-Cause Analysis Matters

The cause of failure can determine whether millions of Turkish lira are payable. Companies should therefore avoid relying exclusively on the insurer’s initial description of the breakdown. Mechanical, electrical or metallurgical investigation may be necessary.

Preserve the Failed Component

A broken shaft, bearing, gear, valve, circuit board or other component may contain critical evidence concerning causation. It should not be discarded merely because replacement is required for production to restart.

What If Production Must Restart Immediately?

Commercial urgency is understandable. The company should photograph and document damaged machinery comprehensively, preserve failed components where possible and arrange an appropriate technical inspection before repairs materially alter the evidence.

Manufacturer Reports Can Be Crucial

The machinery manufacturer or authorized service provider may be able to identify the failure mechanism, repair requirements, replacement parts and expected downtime. Their findings can become important when challenging the insurer’s expert.

Independent Engineering Evidence May Also Be Necessary

Manufacturer involvement is useful but may not resolve every dispute. Independent mechanical, electrical or metallurgical experts may be required where causation is contested.

Operator Error Claims

A machinery breakdown may occur because an employee incorrectly operates equipment, adjusts settings improperly or fails to follow a procedure. Whether resulting damage is covered depends on the policy and circumstances. The insurer should not automatically characterize every human mistake as intentional misconduct.

Electrical Breakdown Claims

Motors, transformers, industrial electrical equipment and control systems can suffer substantial damage from electrical events. Determining whether the loss arose from an insured machinery breakdown, an external electrical event or another cause can affect which policy responds.

Short Circuit Damage

A short circuit may destroy electrical components and stop production. Technical evidence should identify where the electrical failure originated and whether damage extended beyond the initially failed component.

Overheating Claims

Machinery can overheat because of lubrication failure, cooling-system problems, operator error or mechanical defects. The insurer may argue that overheating developed gradually. Temperature logs, maintenance records and control-system data can help reconstruct the event.

Lubrication Failure

Lubrication problems can destroy bearings, gears and other moving components extremely quickly. The investigation should determine whether the failure resulted from inadequate maintenance, sudden pump failure, blocked circulation or another cause.

Pressure-Related Breakdown

Boilers, compressors, hydraulic systems and pressure equipment can suffer sudden failures. Pressure records, alarms and control-system logs should be preserved immediately.

Material Defects and Fatigue

A shaft or structural component may fail because of a material defect or fatigue crack. Metallurgical examination can sometimes determine whether the fracture was sudden or developed progressively.

Maintenance Records Are Important Evidence

Insurers frequently investigate whether machinery was properly maintained. Service reports, scheduled maintenance records, lubrication logs, inspection reports and manufacturer recommendations should therefore be preserved.

Missing Maintenance Records Can Create Problems

Where a company cannot demonstrate maintenance history, the insurer may argue that the breakdown resulted from neglect or deterioration. This does not automatically decide the claim, but it can make the factual dispute substantially harder.

Automated Machinery Data Can Be Powerful Evidence

Modern industrial machinery may record temperature, pressure, vibration, alarms, operating hours and fault codes. These records can provide objective evidence concerning what happened immediately before the breakdown.

Preserve SCADA and PLC Data

Industrial control systems may contain valuable event histories. Data can be overwritten as production resumes, so relevant logs should be preserved promptly.

CCTV Can Also Help

Security or production-area cameras may show the moment of failure, smoke, sparks, vibration, leakage or employee actions immediately before the event. CCTV should be secured before automatic deletion.

What Physical Damage Can Be Claimed?

Depending on the policy, recoverable physical loss may include qualifying repair costs, replacement components, labor and other necessary expenses required to restore insured machinery. The exact compensation depends on the policy’s valuation provisions.

Repair Versus Replacement Is a Major Dispute

The insurer may argue that machinery can be repaired for TRY 5 million while the manufacturer recommends replacement costing TRY 15 million. The central question is whether repair can properly restore the insured equipment according to the applicable insurance standard.

When Is Replacement Necessary?

Replacement may become relevant where the machinery is technically irreparable, critical parts are unavailable, repair cannot restore safe operation or the cost of repair approaches or exceeds the applicable value of the machinery.

Obsolete Machinery Creates Special Problems

An identical replacement may no longer be manufactured. The company may have to purchase a newer model. This can create disputes over betterment because the new machine may have improved capabilities.

Betterment Should Be Distinguished From Necessary Replacement

If the only commercially available equivalent has improved technology, purchasing it does not necessarily mean that the company voluntarily decided to upgrade. The insurer and policyholder may nevertheless dispute how the improvement should affect compensation.

Can Spare Parts Be Claimed?

Necessary replacement parts can potentially form part of a covered repair. The claimant should obtain itemized manufacturer or supplier quotations rather than submitting an unsupported total repair figure.

Labor Costs Can Be Significant

Industrial machinery repair may require specialist engineers and technicians. Labor, dismantling, reassembly and testing can represent a substantial part of the total repair cost.

Transportation Costs

A damaged component may need to be transported to a specialist repair facility or manufacturer. Whether transportation costs are recoverable depends on the applicable policy provisions.

Ordinary Freight and Expedited Freight Should Be Distinguished

Standard transportation necessary to complete a covered repair and extraordinary expedited transportation designed to shorten downtime can raise different insurance issues. The latter may be relevant to business interruption mitigation where appropriate coverage exists.

Customs and Import Costs

Imported replacement components may involve customs-related costs, taxes and other expenses. Their treatment depends on the applicable valuation and policy provisions. Companies should not assume automatically that every import-related cost is either included or excluded.

Foreign Currency Can Dramatically Affect the Claim

Industrial machinery is frequently priced in euros, US dollars, Swiss francs or other foreign currencies. A component originally purchased years ago may cost substantially more at the time of the breakdown.

Historical Purchase Price May Be Misleading

A machine purchased for TRY 10 million several years ago may require TRY 40 million to replace today. The correct insurance valuation depends on the policy rather than simply the original invoice.

Depreciation Can Reduce the Insurer’s Offer

The insurer may apply depreciation because the machinery is old. Whether that deduction is appropriate depends on the policy’s valuation methodology and the nature of the loss.

Do Not Accept an Unexplained Depreciation Percentage

If the insurer deducts 40% for depreciation, the company should determine precisely which contractual provision authorizes the deduction and how the percentage was calculated.

What Is Underinsurance?

Underinsurance may arise where the insured amount is lower than the value that should have been insured under the policy. In qualifying circumstances, the insurer may seek to reduce compensation proportionally.

Example of Machinery Underinsurance

Assume a production line should have been insured for TRY 100 million but the policy provides only TRY 60 million of insured value. A qualifying breakdown causes TRY 20 million of damage. Depending on the applicable policy provisions, the insurer may seek a proportional reduction.

Underinsurance Calculations Can Be Challenged

The insurer’s valuation of the machinery immediately before the loss may itself be disputed. The company should verify replacement values, insured amounts, indexation provisions and the basis used for the alleged underinsurance.

Policy Indexation Is Important During Inflation

Rapid changes in machinery prices and foreign-exchange rates can create insurance gaps between renewal and the date of loss. Any automatic indexation or value-adjustment provisions should therefore be examined.

Deductibles Must Also Be Checked

Machinery policies can contain fixed or percentage deductibles. The insurer should apply the deductible specified for the relevant event and insured machinery.

Multiple Machines Can Create Deductible Disputes

A single mechanical event may damage several interconnected machines. The parties may dispute whether the policy requires one deductible or several. The policy’s event definition and deductible wording become important.

What If the Insurer Completely Rejects the Machinery Claim?

The rejection should be obtained in writing and compared with the policy and technical evidence. Common allegations include wear and tear, poor maintenance, gradual deterioration, pre-existing damage, excluded defects or machinery not being properly insured.

What If the Insurer Accepts the Claim but Pays Too Little?

This becomes primarily a valuation dispute. The company should compare the insurer’s calculation with manufacturer quotations, independent engineering evidence and the applicable valuation basis.

Create an Itemized Repair Schedule

For substantial claims, every major component should be identified separately with its repair or replacement cost, labor, associated expenses and insurer valuation. This makes the disputed balance easier to prove.

Example of an Itemized Machinery Claim

Suppose a company claims TRY 18 million: TRY 10 million for replacement components, TRY 3 million for specialist labor, TRY 2 million for dismantling and installation and TRY 3 million for other qualifying restoration expenses. If the insurer recognizes only TRY 11 million, the company should identify precisely where the remaining TRY 7 million difference arises.

Production Loss Is a Separate Question

One of the biggest mistakes businesses make is assuming that because machinery repair is insured, every day of lost production must also be compensated. Machinery breakdown coverage and business interruption coverage should be examined separately.

Does Machinery Breakdown Insurance Automatically Cover Lost Profits?

Not necessarily. A standard machinery breakdown policy primarily addresses physical damage to insured machinery. Lost turnover, lost production or lost profit generally requires appropriate machinery-breakdown business interruption or loss-of-profit protection.

Why Production Loss Can Exceed Repair Costs

A component may cost TRY 1 million to replace but take six months to manufacture. If the affected machine generates TRY 10 million of monthly sales, the economic consequences can greatly exceed the physical repair cost.

Example: Small Part, Massive Interruption

A specialized gearbox fails. Replacement costs TRY 2 million, but the manufacturer requires five months to produce it. The factory loses substantial production during that period. The machinery claim may concern the TRY 2 million physical damage, while the financial consequences require separate business interruption analysis.

What Must Be Proven for Production Loss?

The business generally needs to establish that the insured machinery damage caused the production interruption, determine the applicable indemnity period and prove the resulting insured financial loss according to the business interruption policy.

Lost Production Is Not Automatically Lost Profit

A factory may lose 100,000 units of production, but that does not necessarily mean that every unproduced unit would have been sold. The financial claim should focus on the turnover and insured gross profit actually lost because of the breakdown.

Customer Orders Can Prove Lost Sales

Confirmed purchase orders, supply contracts and customer correspondence can help establish that reduced production resulted in lost turnover.

Production Records Are Critical

Historical production reports can show normal output, utilization rates and production efficiency. Comparing those figures with output after the breakdown can help quantify the operational effect.

ERP Systems Can Connect Production to Sales

ERP data can demonstrate production quantities, inventory, customer orders and invoicing. This allows the company to connect the mechanical event to the actual commercial loss.

Existing Inventory Can Reduce the Financial Loss

A factory may continue supplying customers from finished-goods inventory even though production has stopped. The business interruption calculation should account for this.

Example: Stock Prevents Immediate Turnover Loss

A manufacturer has six weeks of finished inventory when machinery fails. Production stops for three months, but customer sales continue normally during the first six weeks. The financial interruption may therefore begin later than the physical machinery breakdown.

Alternative Machinery Can Reduce the Loss

Production may be transferred to another machine or facility. Revenue preserved through alternative operations should be reflected in the financial calculation.

Outsourcing Can Reduce Production Loss

A company may subcontract production to another manufacturer while its machinery is repaired. The additional outsourcing expense can potentially be relevant under appropriate business interruption coverage where it reasonably reduces a larger insured loss.

Temporary Machinery Rental

If equivalent machinery can be rented, temporary equipment may allow partial production to continue. Rental agreements and production records should demonstrate how much turnover the temporary equipment preserved.

Overtime and Additional Shifts

After repairs, a factory may run additional shifts to recover delayed production. Extra payroll and operating costs can potentially become relevant where they qualify under the applicable interruption coverage.

Expedited Spare Parts

A company may pay air-freight charges to obtain replacement parts in two weeks instead of eight. If this expense prevents a substantially larger insured production loss, it can be commercially and potentially insurance-relevant.

Evidence Should Show the Loss Avoided

The company should not merely submit an expedited freight invoice. It should explain that the additional TRY 500,000 expense reduced the expected shutdown by six weeks and prevented a significantly larger insured gross-profit loss.

What Is the Indemnity Period?

Business interruption policies generally specify a maximum period during which qualifying financial losses are compensable. A machinery breakdown that affects production beyond that period does not automatically extend coverage.

Machinery Lead Times Make Indemnity Periods Critical

Specialized equipment may require six, twelve or eighteen months to replace. Businesses should examine whether the maximum indemnity period purchased is realistic for their machinery.

Manufacturer Lead-Time Evidence Is Important

If the insurer argues that the machine should have been repaired within two months, manufacturer correspondence confirming a six-month replacement period can become decisive.

Supply-Chain Delays Must Be Analyzed Carefully

Not every delay after a machinery breakdown is automatically attributable to the insured event. The claimant should distinguish unavoidable replacement lead times from unrelated procurement or management delays.

What If a Replacement Part Is Unavailable?

Obsolete equipment can create particularly long interruptions. Evidence should establish attempts to source the original part, compatible alternatives, repair options and replacement-machine availability.

What If the Company Delays Ordering the Part?

The insurer may argue that part of the production loss resulted from the company’s own delay. Businesses should therefore make and document recovery decisions promptly.

Mitigation Decisions Should Be Recorded

Management should preserve internal correspondence and meeting minutes explaining why particular repair, replacement, rental or outsourcing options were selected.

Lost Turnover Must Be Calculated Properly

Business interruption compensation is not simply the amount of sales that disappeared. Expected turnover, actual turnover, gross-profit rate, saved expenses and increased operating costs may all affect the claim.

Historical Sales Are the Starting Point

Monthly historical sales can help establish the turnover the company would probably have achieved without the machinery breakdown.

Seasonality Must Be Considered

A food-processing machine breaking during harvest season may create a much larger loss than the same failure during a quiet period. Historical monthly or weekly figures can demonstrate this difference.

Growth Must Also Be Considered

A company that recently expanded production capacity may have expected substantially higher sales than the previous year. Confirmed orders and documented capacity expansion can support an adjusted calculation.

Declining Demand Cannot Be Ignored

The counterfactual analysis must also consider unfavorable market developments. The business cannot attribute an unrelated decline in customer demand to the machinery breakdown.

Saved Expenses Reduce the Claim

Production shutdown can reduce raw-material purchases, electricity consumption, transportation and other variable expenses. Genuine savings should be reflected in the business interruption calculation.

Continuing Fixed Costs Can Still Matter

Employee salaries, rent, security, software, maintenance and other expenses may continue during the shutdown. Financial records should distinguish expenses that continued from those genuinely saved.

Payroll Records Are Valuable Evidence

If the insurer assumes that employee costs disappeared during the shutdown but the company retained its workforce, payroll records can challenge that assumption.

Energy Bills Can Demonstrate Actual Savings

Comparing electricity and gas consumption before and during the shutdown can provide objective evidence of variable-cost savings.

Independent Financial Analysis May Be Necessary

Large machinery breakdown claims can require both engineering and forensic accounting expertise. Engineers determine why the machinery failed and how long repairs reasonably required, while financial experts calculate the economic consequences.

Engineering and Accounting Evidence Must Match

If the engineer concludes that the machinery should have been repaired within three months but the financial claim assumes a nine-month shutdown, the inconsistency can seriously weaken the claim. Technical and financial models should therefore be coordinated.

The Insurer’s Expert Report Is Not Final

Companies can challenge the insurer’s conclusions concerning causation, repair scope, replacement cost and downtime. Independent reports can be submitted to support a different assessment.

What Should a Technical Objection Address?

The objection should identify the actual failure mechanism, explain why the insurer’s causation conclusion is incorrect, establish the necessary repair or replacement scope and provide evidence of reasonable costs and downtime.

What Should a Financial Objection Address?

The financial challenge should identify expected turnover, actual turnover, gross-profit methodology, saved expenses, mitigation costs and the applicable interruption period.

Example: Insurer Accepts Repair but Rejects Production Loss

A factory receives TRY 6 million for machinery repairs but its TRY 15 million production-loss claim is rejected. The company must first establish that appropriate interruption coverage exists. It must then demonstrate how the covered machinery damage caused the turnover reduction and calculate the insured financial loss according to the policy.

Example: Insurer Says Breakdown Was Wear and Tear

A turbine suffers catastrophic failure. The insurer argues that long-term bearing deterioration caused the event. Independent metallurgical evidence shows that a sudden shaft fracture initiated the failure. The technical characterization can fundamentally affect the coverage dispute.

Example: Insurer Underestimates Repair Costs

The insurer values repair at TRY 4 million. The manufacturer provides a detailed quotation of TRY 7 million, including replacement components, specialist labor and necessary commissioning. The company can challenge the TRY 3 million difference with itemized evidence.

Example: Replacement Takes Six Months

A unique imported production machine suffers irreparable damage. Replacement requires six months. The insurer argues that the interruption should have lasted only three months. Manufacturer production schedules, shipping documentation and installation requirements can demonstrate why the longer period was reasonable.

Example: Production Continues Through Outsourcing

A manufacturer loses its primary machine but outsources 60% of production. The interruption claim should not be calculated as though all turnover disappeared. Instead, the preserved revenue and qualifying additional outsourcing costs should be incorporated into the financial analysis.

Can Advance or Partial Payments Be Requested?

Where a portion of the machinery damage is undisputed, businesses may seek payment of the undisputed amount while continuing to pursue the disputed balance. The legal effect of any payment documentation should be reviewed carefully.

Do Not Accidentally Settle the Production-Loss Claim

An insurer may offer payment for machinery damage accompanied by a broad release. Before signing, the company should determine whether the document also purports to settle business interruption or production-loss claims.

Full and Final Settlement Documents Require Care

A company urgently needing repair funds may sign a settlement without realizing that it waives additional claims. The wording should therefore be reviewed before acceptance.

Can Interest Be Claimed on Unpaid Machinery Compensation?

Potentially. Where payable insurance compensation has become due and remains unpaid, applicable default-interest claims may arise. The notification, document-submission, expert-inspection and payment chronology should be preserved.

Can Interest Apply to Production-Loss Compensation?

Potentially, once the relevant compensation has become due and the insurer is in default. The timing analysis can differ from the physical machinery claim because interruption losses may develop over an extended period.

Can Insurance Arbitration Be Used?

Depending on the insurer and applicable procedural framework, insurance arbitration may potentially be available for rejected or underpaid machinery breakdown and related insurance claims. The amount and technical complexity of the dispute should be considered.

Can a Lawsuit Be Filed?

Where applicable procedural requirements are satisfied, judicial remedies may also be available. Machinery breakdown litigation can involve mechanical engineering, electrical engineering, accounting and insurance expertise.

What Evidence Should Be Collected Immediately?

Companies should preserve the complete insurance policy, machinery schedule, maintenance records, manufacturer manuals, operating logs, alarm histories, SCADA or PLC data, CCTV, photographs, failed components, expert reports, repair quotations, invoices and correspondence with the insurer.

What Financial Evidence Should Be Preserved?

Historical sales reports, accounting records, ERP data, production reports, customer contracts, purchase orders, cancelled orders, payroll records, utility bills, outsourcing invoices and temporary-equipment costs can all become relevant.

Build a Machinery Breakdown Timeline

The company should document when the failure occurred, when production stopped, when the insurer was notified, when experts inspected, when repair options were obtained, when parts were ordered, when they arrived and when production resumed.

Build a Separate Production-Loss Schedule

For each affected month or week, the company should record normal expected production, actual production, expected turnover, actual turnover, customer orders lost, mitigation measures and additional operating expenses.

Do Not Wait Until the End of the Claim

Evidence becomes harder to reconstruct months later. Production loss should be documented from the first day of the shutdown.

Foreign-Owned Companies Can Pursue Machinery Claims in Turkey

Foreign ownership does not itself prevent a company operating in Turkey from pursuing compensation under an applicable machinery breakdown policy. Foreign-owned manufacturers, energy businesses, hotels, logistics companies and industrial enterprises can assert their contractual insurance rights.

Imported Machinery Requires Additional Preparation

Foreign-owned industrial companies frequently operate equipment supplied by overseas manufacturers. Manufacturer reports, foreign-currency quotations, shipping records and international technical correspondence should be preserved and incorporated into the claim.

Multinational Insurance Programs Should Be Checked

A Turkish subsidiary may have local machinery insurance together with a global master, excess or difference-in-conditions policy. A major machinery breakdown should therefore trigger review of all potentially applicable insurance layers.

Do Not Assume the Local Policy Is the Only Coverage

The local insurer’s limit may not represent the entire available insurance protection. International group coverage can potentially provide additional protection depending on its wording.

Common Reasons Machinery Claims Are Underpaid

Disputes frequently involve wear-and-tear allegations, inadequate maintenance, repair-versus-replacement disagreements, depreciation, obsolete machinery, underinsurance, deductibles, omitted labor costs, underestimated component prices and unrealistic repair periods.

Common Reasons Production-Loss Claims Are Rejected

The insurer may argue that no business interruption coverage exists, the underlying machinery event was not insured, the shutdown was longer than reasonably necessary, lost sales were not proven, the company had sufficient inventory or alternative production capacity, or the claimed period exceeds the maximum indemnity period.

A Strong Claim Separates Physical and Financial Loss

The physical claim should answer: What failed, why did it fail, what must be repaired or replaced and what does that cost? The interruption claim should separately answer: How did the failure affect production, how did that reduce turnover, what gross profit was lost and what reasonable expenses were incurred to reduce the loss?

2026 Strategy for Machinery Breakdown Insurance Claims in Turkey

For substantial machinery breakdown claims in Turkey in 2026, companies should build two coordinated but separate evidentiary files. The first should establish the physical machinery loss through the policy, machinery schedule, failure data, maintenance records, preserved components, manufacturer findings, independent engineering evidence and itemized repair or replacement quotations. The second should establish the financial consequences through historical production, customer orders, expected and actual turnover, gross-profit calculations, saved expenses, mitigation costs and the reasonable recovery period. Any insurer allegation of wear and tear, poor maintenance, depreciation, underinsurance or excessive downtime should then be tested against the policy and evidence rather than accepted as a general deduction. The practical strategy is therefore: preserve the failed machinery → establish root cause → confirm coverage → determine repair versus replacement → quantify physical restoration costs → verify depreciation and underinsurance → establish reasonable downtime → document lost production → convert production loss into insured financial loss → account for alternative production and saved costs → document mitigation expenses → challenge the insurer’s technical and financial calculations → pursue the unpaid compensation through the appropriate dispute procedure.

Frequently Asked Questions

1. Does machinery breakdown insurance cover every mechanical failure?

No. Coverage depends on the cause of the breakdown and policy wording. Normal wear, gradual deterioration and other exclusions may create disputes.

2. Can a company claim the full cost of replacing damaged machinery?

Potentially, depending on the policy and whether replacement rather than repair is technically and economically justified. The applicable valuation basis must also be considered.

3. Can the insurer reject a claim because the machinery was old?

Age alone does not necessarily determine coverage. The insurer may raise wear, deterioration or depreciation issues, but the actual cause of the breakdown and policy provisions remain critical.

4. Does machinery breakdown insurance automatically cover lost production?

Not necessarily. Physical machinery coverage and business interruption or loss-of-profit coverage are generally separate issues. Appropriate interruption coverage should be confirmed.

5. Can lost customer orders be included in a production-loss claim?

They can provide evidence of lost turnover where appropriate business interruption coverage exists and the orders were genuinely lost because of the insured machinery breakdown.

6. Can outsourcing costs be claimed while machinery is repaired?

Potentially, where appropriate interruption coverage exists and outsourcing reasonably reduces a larger insured financial loss.

7. What if the insurer says repairs should have taken less time?

Manufacturer lead-time evidence, technical reports, parts availability, shipping documents and installation schedules can be used to establish a reasonable repair or replacement period.

8. Can the insurer’s machinery expert report be challenged?

Yes. Manufacturer findings and independent mechanical, electrical or metallurgical reports can be used to challenge the insurer’s conclusions concerning causation, repair scope and valuation.

9. Can interest be claimed on delayed machinery breakdown compensation?

Potentially, where compensation has become due and the insurer remains in default. The applicable timing and interest rules should be examined for the specific claim.

10. Can foreign-owned factories claim machinery breakdown compensation in Turkey?

Yes. Foreign ownership does not itself prevent an insured company from pursuing machinery breakdown or related business interruption compensation under an applicable insurance policy.

Legal Support for Machinery Breakdown Insurance Claims in Turkey

Machinery breakdown claims can involve two major categories of loss: the physical cost of repairing or replacing damaged machinery and the financial consequences of lost production. In industrial claims, the production interruption can substantially exceed the value of the damaged component itself.

Fırat Fesih Kaya Law Office provides legal assistance to Turkish and foreign-owned companies concerning machinery breakdown insurance claims, rejected or underpaid repair costs, repair-versus-replacement disputes, production losses, business interruption compensation and insurer expert reports.

Fırat Fesih Kaya can assess the insurance policy and machinery schedule, coordinate the legal evaluation of technical and financial evidence, identify incorrect insurer deductions and pursue outstanding machinery and business interruption compensation through the appropriate legal procedure.

Phone: +90 312 434 22 22
Mobile Phone: +90 532 769 22 22
Email: info@firatfesihkaya.av.tr
Address: Mevlana Boulevard No: 221, Yildirim Tower, Balgat, Cankaya / Ankara, Turkey