If the developments are described as a “war,” no damages will be covered. On the other hand, there is an ongoing debate over whether the risk of “uprising” is covered by insurance.

Turkish contractors have undertaken projects worth nearly $16 billion in Libya. However, the latest developments began with revolts, turned into civil war and now the bombardment of foreign powers reveals the dilemma of deciding whether the damages are covered or not.

As insurance coverage given to Turkish builders in Libya varies from policy to policy, making a general comment on the issue is impossible, according to the Association of the Insurance and Reinsurance Companies of Turkey, or TSRŞB. “Damages should be paid if there is a guarantee including some situations such as strike, lock out, turmoil and uprising. But on the other hand, damages due to a war, invasion, conflict and military intervention are by no means paid [under the current situation],” a written statement from the TSRŞB said.

“There is a need to define the goal of demonstrations in Libya. Statements from competent authorities and evaluations by international institutions will have a role in defining the recent developments for insurance companies,” the statement read.

“If we describe these developments being experienced in Libya as an uprising, then damages will be paid,” said Çetin Alanya, director general of Dubai Sigorta. “The important thing is the definition of developments. But it is still early to make a decision,” Alanya said.

The turmoil first began as a revolt against the central authority, then turned into an uprising and a civil war and now a state of war is in question, according to Uğur Gülen, director general of Turkey’s Aksigorta. “Insurance policy coverage given to construction companies should be examined to determine whether the damages are included in policy coverage or not. If the policy does not cover a state of war, there will be no damages paid,” Gülen said. 

Aviva Sigorta, along with other companies, has given insurance policies to a total of six construction projects. “The cost of coverage varies between $2.5 million and $10 million,” said Ertan Fırat, director general of Aviva Sigorta. “As we do not have strong information or documents related to the size of the damages, we do not know if these damages are payable.”

The content of policies bought by construction companies in Libya should be analyzed, according to Yılmaz Yıldız, chief executive officer of Groupama Turkey. “Which additional coverage was taken out for which special situations, if the insurance coverage includes the damages in Libya or not are some of the important points. A reasonable international solution should be found to this issue,” Yıldız said.