A launch is the riskiest moment in the life of a satellite. Years of work and a large part of the project budget sit on top of a rocket for a few minutes of flight. Insurance and the contractual allocation of risk are therefore essential parts of every launch campaign, even if they rarely appear in press releases.
The main types of cover
- Pre-launch insurance: covers damage to the satellite during transport, integration and processing at the launch site.
- Launch insurance: covers loss of or damage to the satellite from the moment of intentional ignition or lift off until a defined period after separation, often including the early phase in orbit.
- In-orbit insurance: covers failures during operations, usually renewed on a yearly basis.
- Third party liability insurance: covers damage that the launch or the satellite may cause to people or property of others.
Regulatory requirements
Many countries require liability cover as a condition of a launch or operating licence. In the United States, the Federal Aviation Administration licenses commercial launches and requires licensees to obtain third party liability insurance up to an amount the FAA determines for each mission. Other countries set comparable conditions in their national space laws, because states remain internationally responsible for national space activities under the UN space treaties.
Cross waivers in launch contracts
Launch contracts typically include cross waivers of liability. Each party, including the launch provider, the customer and their contractors, agrees to bear its own losses instead of suing the others. This keeps the risk manageable for everyone and is one reason why customers usually insure their own satellite rather than relying on claims against the launch provider.
Replacement launch instead of cash
Some launch providers offer a relaunch guarantee as an alternative or complement to insurance. If a launch fails, the customer receives a new launch slot. This helps with schedule risk but does not pay for rebuilding the satellite.
Practical tips for small satellite operators
- Check early which insurance the launch contract and the national licence require.
- Clarify when launch cover ends and in-orbit cover begins.
- Include insurance costs and broker lead times in the project budget and schedule.
Related reading
- Launch Range Safety: How Rocket Launches Are Licensed and Protected
- The Outer Space Treaty: The Legal Foundation of Spaceflight
- From Contract to Liftoff: How a Satellite Launch Works Step by Step
Sources
Cover image: Antares rocket being prepared for launch at NASA's Wallops Flight Facility. Credit: NASA (201401080005HQ), public domain.