In cargo insurance, recourse means that the insurer that has paid a loss to its insured claims back the amount paid from the carrier, warehouse keeper or port operator responsible for the damage. It is based on the principle of subrogation in the Turkish Commercial Code (TTK): the insurer steps into the shoes of the insured to the extent of the amount paid. The success of recourse depends on the insured meeting the notice deadlines and preserving its rights against the carrier.
Subrogation: the legal basis of recourse
Article 1472 of the Turkish Commercial Code No. 6102 states that in property insurance the insurer, when it pays compensation, legally takes the place of the insured. If the insured has a right of action against the persons responsible for the damage, this right passes to the insurer to the extent of the amount paid. If an action or enforcement proceeding has already been brought against those responsible, the insurer can continue it from where it stands by proving the payment. The same principle applies to liability insurance under Article 1481.
This rule serves two purposes. The insured cannot enrich itself by collecting the same loss from both the insurer and the carrier. And the party that caused the damage cannot escape liability merely because the cargo owner was insured.
How does recourse work?
- Damage and notice: The consignee notes the damage with a reservation on the delivery document, notifies the insurer and sends the carrier a written notice.
- Survey: The insurer's surveyor determines the cause and extent of the damage and the stage at which it occurred; details are in the entry on the cargo damage survey.
- Payment of compensation: The insurer pays according to the policy conditions and obtains a release and an assignment document from the insured.
- Recourse claim: The insurer or a recovery agent sends a written claim to the responsible carrier or its liability insurer.
- Settlement or litigation: If no agreement is reached, the insurer sues with the rights of the insured.
How do CMR time limits affect recourse?
Because the insurer steps into the shoes of the insured, it cannot obtain more than the insured had. All of the carrier's defences are also valid against the insurer. In road transport this shows up mainly in two areas:
| Rule | CMR provision | Effect on recourse |
|---|---|---|
| Notice of damage | Written reservation at delivery for apparent damage, within 7 days of delivery (excluding Sundays and public holidays) for non-apparent damage; written notice within 21 days of delivery for delay | Without a reservation, the goods are presumed to have been delivered in good condition, making proof difficult |
| Limit of liability | 8.33 SDR per kilogram of gross weight | For high-value goods, the insurer can recover only part of what it paid |
| Limitation period | General rule 1 year, 3 years for wilful misconduct or equivalent default | If the period is missed, the right of recourse is effectively lost |
The form of the notice is explained in the entry on CMR damage notice and reservation, and the time limits in the entry on the CMR limitation period.
The insured's duty to preserve the right of recourse
Under TTK Art. 1472/2, if the insured acts in a way that infringes the rights that have passed to the insurer, it is liable to the insurer. In practice this means:
- Not signing a release or "clean delivery" confirmation that frees the carrier from liability.
- Writing the reservation on the CMR and the delivery document in time.
- Preserving the damaged goods, packaging and photographs until the surveyor has seen them.
- Not settling with the carrier without the insurer's knowledge.
If the insurer has paid the loss only in part, for example because of a deductible, the insured retains its own right against the carrier for the remaining part.
What does a waiver of recourse mean?
Some policies state that the insurer will not take recourse against certain persons, for example group companies or contractors specified by contract. This clause can be useful for protecting relationships; however, provisions in the insured's contract with the carrier that limit or exclude liability must be notified to the insurer in advance. Otherwise, the insured may be deemed to have infringed the right of recourse. For structuring transport and insurance cover together, see the cargo insurance page.