Companies may find themselves unsure of which regulator they need to work with. Licensing processes may be unclear, even to the regulators themselves. Sometimes, the whole process may be an exploratory one.
But compliance is tied directly to insurance eligibility, investor confidence, and access to launch opportunities. That’s why it’s critical for any company breaking into the space economy to stay informed.
Space Law – the Latest Updates
Key Updates in the U.S. include a request by the House Science Committee for a formal review of the FAA’s Part 450 launch regulations. This is due to industry concerns about the licensing process for commercial launch and re-entry (i.e., its complexity and efficiency).
Also, the Office of Space Commerce (OSC) is planning to implement a regulatory system for ‘novel space activities’. This includes in-space manufacturing, space resource utilization, and satellite servicing. The advisory committee, ACES, is working to understand operator needs as part of the process.
Beyond the U.S., the UK is funding regulatory sandboxes to test and refine rules for new activities like satellite servicing and debris removal. Meanwhile, the EU is preparing to implement the EU Space Act which will address factors like congestion, collision and security threats.
There’s a widening gap between current international law and new autonomous systems in space. When the Outer Space Treaty was written, the idea of AI-driven systems communicating with each other wasn’t accounted for.
Such innovations render certain clauses irrelevant today – like the requirement for consultation between actors before going ahead with activities that might harmfully interfere with other entities’ actions. Reforms are needed to address these types of discrepancies.
Risk Exposure in the Space Economy
The costs of failure in space are immediate and dramatic. Common categories of commercial space risk are:
- Technical risk: Launch failures, software errors and hardware malfunctions.
- Operational risk: Satellite collisions, space debris and communication failures.
- Regulatory risk: Changes in licensing requirements, denied approvals or delays.
- Financial risk: High up-front capital requirements, limited insurance coverage and long ROI timelines.
- Reputational risk: Public or investor backlash following a high-profile failure.
Effective risk management involves thorough due diligence and working with underwriters who understand the technical and financial intricacies of operating in space.
Why Regulation Impacts Financial Viability
In the global space economy, compliance is directly linked to a company’s ability to secure funding, acquire insurance and scale operations. Investors need to know that companies have the appropriate licenses and approvals, and insurers won’t provide cover without that knowledge.
A launch license delay, for example, doesn’t just push a mission back. It can trigger contractual penalties, higher expenditure, and delay revenue. Likewise, failing to secure spectrum can render a satellite in orbit commercially useless.
Space insurance markets expect clients to meet regulatory standards for launch safety, mission planning, and debris mitigation. Without those, coverage may be denied or priced out of reach.
Aligning Risk, Regulation, and Reward
The companies thriving in the new space economy are those that treat compliance and risk planning as strategic tools – and not as obstacles. They account for potential regulatory changes in their financial model. They engage with regulators early and clarify expectations well before applying for licenses. And they partner with insurers who understand aerospace risk and commercial pressures in the space economy.
