Insurance & Risk Management

1. Obtaining General Liability and Business Insurance

   Securing appropriate insurance coverage is essential to protect your business against potential liabilities and unforeseen events.

   Key Insurance Policies:
   • Commercial General Liability (CGL) Insurance:
     • Coverage: Protects against claims of bodily injury, property damage, and personal or advertising injury arising from your business operations.
     • Considerations: Ensure the policy limits are adequate for your business size and industry risks.
   • Property Insurance:
     • Coverage: Covers damage to your physical assets, including buildings, equipment, and inventory, due to events like fire, theft, or natural disasters.
     • Considerations: Assess the replacement value of your assets to determine appropriate coverage limits.
   • Business Interruption Insurance:
     • Coverage: Compensates for lost income and operating expenses if your business operations are halted due to a covered peril.
     • Considerations: Evaluate the potential duration of disruptions to select suitable coverage periods.
   
   

   Regulatory Compliance:

   In Turkey, insurance companies must be licensed by the Undersecretariat of Treasury to operate legally. It's crucial to procure insurance policies from authorized insurers to ensure compliance and validity.

2. Insuring Factory Machinery and Property

   Protecting your factory's machinery and property is vital to maintain operational efficiency and financial stability.

   Machinery Insurance:
   • Machinery Breakdown Insurance:
     • Coverage: Provides protection against sudden and accidental physical damage or breakdown of machinery, covering repair or replacement costs.
     • Considerations: Regular maintenance and adherence to manufacturer guidelines may be required to uphold policy terms.
   Property Insurance:
   • All-Risk Property Insurance:
     • Coverage: Offers comprehensive protection against a wide range of risks to your property, except those explicitly excluded.
     • Considerations: Review policy exclusions carefully to understand coverage limitations.
3. Implementing Risk Management and Compliance Programs

   A proactive risk management strategy is essential to identify, assess, and mitigate potential risks that could impact your manufacturing operations.

   Risk Management Strategies:
   • Risk Assessment:
     • Action: Conduct thorough assessments to identify potential risks in your operations, including safety hazards, supply chain disruptions, and compliance issues.
     • Tools: Utilize risk matrices and assessment tools to prioritize risks based on their likelihood and impact.
   • Internal Controls:
     • Action: Establish robust internal controls to prevent and detect errors or irregularities in financial reporting and operational processes.
     • Examples: Segregation of duties, authorization protocols, and regular audits.
   • Compliance Programs:
     • Action: Develop and implement compliance programs to ensure adherence to applicable laws, regulations, and industry standards.
     • Components: Policies and procedures, employee training, monitoring mechanisms, and reporting channels.
   Professional Assistance:

   Engaging with professional services firms can enhance your risk management and compliance efforts. For instance, KPMG Turkey offers Governance, Risk & Compliance Services, deploying multidisciplinary teams experienced in financial and operational internal auditing to assist organizations in developing effective risk management frameworks.

By obtaining comprehensive insurance coverage and implementing robust risk management and compliance programs, you can protect your manufacturing facility in Turkey against potential risks and ensure long-term operational success.