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The new space economy is growing at a fast clip. It’s current output of circa 630 billion turnover is predicted to reach 1.8 trillion by 2035. The market is no longer dominated by a few key players, and launch rates continue to increase substantially. Emerging commercial applications like in-space manufacturing, advanced power-generation concepts, space tourism, and longer-term ambitions around speculative and aspirational business models like asteroid resource extraction are also shaping the landscape.
The role of space insurance is expanding accordingly. Traditionally, space insurance has focused heavily on launch and early operational risks, alongside in-orbit and liability coverages. Today, the best specialized providers offer coverage that reflects the realities of an increasingly diversified and interdependent space industry: cover that supports risk management across areas like manufacturing, logistics, launch, in-orbit operations, downstream users of space-derived data, and novel mission profiles.
How Does Space Insurance Work?
Space insurance can be structured across distinct mission phases: pre-launch, launch and in-orbit operations. It can also be combined into integrated policies that address the risks tied to new commercial models and reduce potential coverage gaps.
Third-party liability coverage can respond if an operator’s activities cause damage to third parties, including other spacecraft and, depending on the circumstances and wording, certain ground-based losses. In some jurisdictions, regulators require evidence of financial responsibility, often satisfied in part through liability insurance.
Policies are engineered around specific mission profiles and informed by technical assessments and reviews of an operator’s risk-mitigation plans. Many insurers increasingly examine cybersecurity controls and AI-enabled functions as part of their underwriting.
The Growing Exposures Facing Space Operators
Launch volumes are surging and Earth’s orbits are becoming more and more populated, elevating collision and debris-related risks. Today’s spacecrafts are more complex, integrating greater onboard automation and AI-supported functions. Interdependence between in-orbit and ground systems introduces additional cascading risks.
Regulatory ambiguity also persists across jurisdictions, creating uncertainty around liability allocation, debris-mitigation expectations and cross-border compliance. These factors increase exposure for any company operating in the space economy.
What Is the Difference Between Launch and In-orbit Insurance?
Launch insurance typically covers the spacecraft during the launch and deployment sequence; attachment and end points vary by policy and may be combined with LEOP coverage.
In-orbit insurance applies once the satellite or ‘payload’ is deployed and coverage has incepted as defined in the policy. Depending on wording, it may respond to certain failures, malfunctions, collision events, and some space-weather impacts, often subject to exclusions and limits.”
Some operators obtain launch plus early-orbit phase (LEOP) insurance to cover these high-risk phases under one policy.
Does Space Insurance Cover Pre-Launch Transport Damage?
Often. Ground-risk or pre-launch coverage can be arranged to cover material damage during transportation, handling, and integration, subject to terms.
What Is a Typical Space Insurance Coverage?
Coverage can address the full mission lifecycle often across multiple policies. The below are not always included, as there is no ‘standard’ space coverage, but they’re representative of risks that operators may want to insure against.
- Manufacturing and supply-chain exposures. Coverage may respond to physical loss or damage during manufacturing and pre-launch handling, subject to terms. Pure schedule delays and shortages are typically not covered without specific, tailored structures.
- Pre-launch transport and processing. This covers risks from the time the spacecraft leaves the manufacturing site up to launch.
- Launch coverage. This protects against loss or failure from ignition to deployment.
- In-orbit insurance. This protects against total loss, constructive total loss or partial loss after deployment.
- Service interruption. Where available, bespoke programs, sometimes paired with cyber/tech cover, can address certain outage-related losses subject to strict triggers and limits.
- End-of-life manoeuvres. Some bespoke programs may be structured to address risks associated with de-orbiting or repositioning, subject to underwriting.
Can You Insure a Satellite for Its Entire Lifespan?
In many cases, operators can assemble coverage from production through end-of-life via phase-specific policies and renewals, subject to market availability. Operators may choose a multi-phase policy that covers pre-launch, launch, in-orbit operations and decommissioning, or separate phase-specific policies renewed over time.
In-orbit policies are typically renewed annually. Depending on circumstances, the risk of failure can be during the first year in orbit, so costs may decrease in subsequent renewals. Before each renewal, the satellite’s health is reviewed. If anomalies occurred during the preceding policy period, underwriters may adjust terms and exclusions or deductibles may be added to keep premiums reasonable.
The insured value is agreed at the start of the satellite’s service life and can reflect replacement value. Depending on how the policy is structured, the sum insured may reduce over time as the satellite’s expected remaining life declines.
What Are the Exclusions in a Standard Satellite Policy?
Exclusions vary by policy and differ between traditional offerings and products built for the new space economy. A legacy policy may not address AI-related risks or novel cyber exposures, while a specialized product tailored to space innovators may include them.
Some exclusions may include:
- Limits on rideshare payload coverage.
- Experimental or unproven technologies.
- Acts of war or terrorism.
- Intentional misconduct or failure to follow prescribed procedures.
- Known design defects or nondisclosed anomalies.
- Gradual degradation.
- Severe space-weather events (which may be excluded or limited).
Takeaways for Brokers and Their Clients
With launch frequency increasing and orbital infrastructures expanding, insurance plays a central role in the growth of the space economy. Coverage can span much of a mission’s lifecycle from pre-launch to end-of-life — and protects against third-party claims. It also supports companies entering sectors such as in-space manufacturing and tourism.
Traditional insurers may not always address novel technologies or complex mission architectures. Space innovators are best protected by specialized, tailored solutions that account for emerging risks. To learn more about Relm’s bespoke space insurance products, contact us today.
