Category: Emerging risks · Reviewed by Jake Leat, Associate Director · Last reviewed 2026-06-10
Space insurance is the speciality class of property and liability insurance underwriting the construction, launch, in-orbit operation and re-entry of spacecraft, together with the compulsory third-party liability cover required under the United Kingdom’s Outer Space Act 1986 and the Space Industry Act 2018.
The UK’s space-licensing regime, administered by the Civil Aviation Authority as the regulator under the Space Industry Act 2018 and Space Industry Regulations 2021 (SI 2021/792), requires licensees to indemnify the UK Government against claims under the United Nations 1967 Outer Space Treaty and the 1972 Liability Convention. The compulsory third-party liability insurance backstops that indemnity, with limits set by the regulator. Capacity is concentrated in the Lloyd’s of London market and a small number of specialty reinsurers.
Definition
Space insurance comprises a sequence of cover periods over the spacecraft’s lifecycle:
Pre-launch (construction and transit) — physical damage to the satellite during build, test, integration and transport to the launch site.
Launch — risk attaches at intentional ignition or earlier “intentional ignition minus” and covers loss of the spacecraft up to in-orbit testing completion.
In-orbit (commissioning and operational life) — covers partial and total loss in orbit, including catastrophic failure, propulsion anomaly and reduced operational life.
Re-entry and de-orbit — physical damage and post-mission disposal liabilities.
Third-party liability — bodily injury and property damage to third parties on the ground or in orbit, compulsory under UK law.
Legal and regulatory basis
The UK statutory framework includes:
Outer Space Act 1986 — applies to UK persons carrying on space activities outside the UK; requires licensing and indemnity to Government.
Space Industry Act 2018 — domestic UK launch licensing regime.
Space Industry Regulations 2021 (SI 2021/792) — detailed operating, security, range safety and insurance requirements.
Outer Space Treaty 1967 — international state liability principle.
Convention on International Liability for Damage Caused by Space Objects 1972 — strict liability for damage on the surface, fault-based liability in space.
Registration Convention 1976 — UN registry of launched objects.
FCA Handbook ICOBS — distribution of UK-placed cover (see ICOBS).
The CAA, acting as the UK’s space regulator, publishes licence guidance and sets the required modelled insurance amount (MIA) using its Risk Modelling and Insurance Statement.
How it works in practice
A typical commercial satellite programme is insured in two main slices:
Launch-plus-one-year wording — combining the launch risk with the first 12 months in orbit, often at a single premium.
Annual in-orbit renewals thereafter.
TPL programme running parallel to the lifecycle, sized to the CAA-determined MIA (commonly EUR 60 million for small satellites under the Outer Space Act practice, with higher limits set under the SIA 2018 case by case).
Lloyd’s space slips with a lead syndicate and broad subscription; substantial co-insurance and reinsurance.
Pre-bind survey by the Space Insurance Market’s nominated engineers reviewing test campaign reports and launch-vehicle reliability data.
Common variations and subsequent developments
OneWeb constellation losses (2022) following the Russia/Ukraine conflict, and the Viasat-3 antenna failure (2023), materially hardened the in-orbit market.
Constellation insurance — bespoke wordings for large LEO constellations addressing portfolio loss frequency.
Re-entry liability — post-mission disposal under the IADC Space Debris Mitigation Guidelines and the UN COPUOS Long-term Sustainability Guidelines.
UK launch sites — Cornwall Spaceport and SaxaVord (Shetland) entered operation, prompting domestic launch wordings.
Example
A UK small-satellite operator licenses a launch under the Space Industry Act 2018. The CAA sets a modelled insurance amount of EUR 60 million for TPL. The insurance programme comprises: launch-plus-12-months cover for the spacecraft’s USD 25 million insured value, written on Lloyd’s space slips with a lead syndicate; in-orbit annual renewals thereafter; and a EUR 60 million TPL layer matched to the licence MIA. Following a successful launch and orbit insertion, the spacecraft operates nominally until year three when a propulsion anomaly reduces operational life; the operator notifies a partial loss claim under the then in-force in-orbit policy.
Space Industry Regulations 2021 (SI 2021/792), legislation.gov.uk.
UN Treaty on Principles Governing the Activities of States in the Exploration and Use of Outer Space (1967).
UN Convention on International Liability for Damage Caused by Space Objects (1972).
UN Convention on Registration of Objects Launched into Outer Space (1976).
CAA, “Spaceflight regulation: applying for a licence”, caa.co.uk.
Inter-Agency Space Debris Coordination Committee, “IADC Space Debris Mitigation Guidelines” (current edition).
Lloyd’s, market bulletins on space underwriting (various).
This entry is part of the Apex Insurance Wiki. Last reviewed by Matt Bartlett on 2026-06-10. Next review: 2026-12-10.
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