There is sufficient capacity in the insurance market to cover both government and commercial launches, although any failures could drive up costs and cause insurers to reduce or eliminate coverage.
That is the main conclusion of a review done by the firm Willis Inspace. The company’s senior vice president, Raymond F. Duffy Jr., presented the conclusions to the FAA’s Commercial Space Transportation Advisory Committee (COMSTAC) on October 30. The conclusions included:
- Sufficient aerospace liability insurance capacity exists today to provide coverage for government and commercial launches.
- Insurers will also be able to provide launch liability coverage for new emerging launch vehicles and space operations.
- Insurers look for CSLA indemnification, PL 85-804 designation, NASA Space Act protection, and other limitation of liability clauses.
- Due to the low annual market premium for space liability, a significant insured loss will be subsidized by premium from other lines of insurance business
- As a result of a loss, the market would likely experience:
- Significantly increased pricing
- Potential withdrawal of indemnification and other limitation of liability extensions from the Government.
- Reduction or withdrawal of coverage by insurers