Q&As

What is space insurance?

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Published on LexisPSL on 13/10/2017

The following Insurance & Reinsurance Q&A provides comprehensive and up to date legal information covering:

  • What is space insurance?
  • What is space insurance?
  • What are the specific risks covered by space insurance?
  • Material damage
  • Consequential financial loss
  • Third-party liability

What is space insurance?

What is space insurance?

Space insurance is specifically designed to cover the unique risks associated with travel into outer space. Space activities demand adequate insurance against losses including liability and property damage to spacecrafts. There is a potentially huge third party liability exposure for death or injury or damage to property arising out of the launch and operation of spacecrafts. Spacecraft insurance was initially written in the aviation market. However, with the increased demand for such insurance since the early 1980s, a dedicated space insurance market employing specialist underwriters emerged. To the extent that spacecraft insurance involves the insurance of a vehicle that passes through the airspace, it resembles, and is, in certain respects, modelled on aircraft or aviation insurance. See Practice Note: Use of insurance in aviation finance transactions. Thus, the risks associated with spacecraft operations may similarly be divided into the risk of loss or damage to the spacecraft or on-board equipment, and the risks of liability to third parties and occupants.

The principal insurers in the space insurance market are in the US, France, UK, Germany, Switzerland, Japan and the UAE. In addition, substantial domestic insurance capacity may be available in other space-faring nations, for example, in China and Russia.

What are the specific risks covered by space insurance?

The risks arising out of the launch and operation of spacecrafts include injury,

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