A Brief History of Satellite Insurance
Satellite insurance has been around almost as long as satellites themselves. The first one to be insured was Intelsat I (aka. Early Bird). In 1965, Lloyds of London underwrote the policy, which covered pre-launch damage. Back then, satellite insurance was a niche product, reserved for state-backed programs and major aerospace firms.
By the 1990s, the satellite insurance market had matured. This was the result of several losses in the 80s, which triggered hefty payouts. In the years that followed, policies became more comprehensive.
Beyond satellite launch insurance, they started covering in-orbit malfunctions and third-party liability. Premiums were steep, but necessary.
Fast-forward to today, and things have evolved further. With reusable launch vehicles, rideshare missions, and smallsats, coverage models are being pushed to adapt. Yet many satellite insurance companies are still catching up.
Satellite Insurance Market Background
The satellite insurance market covers a variety of mission phases:
- Pre-launch: This covers damage to a satellite or its components during manufacturing, assembly and testing.
- Launch insurance: This protects from the point of ignition to successful deployment. This phase carries the highest risk of total loss.
- In-orbit insurance: This begins once the satellite is functioning in its intended orbit. It covers risks including malfunctions, collisions and power failures.
- Third-party liability: This protects operators against claims stemming from damage their satellite may cause to other space assets or Earth-based property. The country of launch typically mandates the operator to have this type of coverage.
Limits of Outdated Satellite Insurance Policies
Not every policy is built for the modern space economy. Many offerings were designed with large, geostationary satellites in mind – not smallsats or short-duration missions, which are becoming more common. In fact, the vast majority of satellites deployed today are uninsured due to the costs involved – or lack of suitable coverage.
Rigid Underwriting Criteria
Traditional satellite insurance companies rely on proven technology and extensive flight history. That puts newer hardware and novel propulsion systems at a disadvantage. For startups pushing the boundaries, that often means higher premiums – or outright exclusions.
Limited Coverage for Rideshare Missions
Policies are typically developed for individual satellite owners, not for the complex, multi-party risk scenarios of rideshare launches.
High Scope for Disputes
Some satellite insurance policies cover both constructive total loss and partial loss, where the insured can get proportional compensation. However, disputes can arise over how loss is quantified.
Future-Focused Coverage for a New Space Age
To serve the influx of satellite operators, brokers need access to satellite insurance companies that understand the pace and complexity of modern missions. Policies must adapt to cover newer technologies, short-term deployments and mixed-use payloads. They must respond to the economics of the commercial space race – not just the risks of the last century.
Relm provides specialized policies covering launch failures, orbital debris collisions, supply chain risk and more.
