Space insurance developments in the UK and Europe

What is Space insurance?

The first space insurance policy, which covered physical pre-launch damage, was provided in April 1965 by Lloyd’s of London for Intelsat I, otherwise appropriately known as “Early Bird”, the first communications satellite to be placed in geosynchronous orbit. Since then, it has evolved alongside the space industry, becoming increasingly sophisticated in underwriting complex, high-value risks. As private companies entered what was once a government-dominated domain, the demand for comprehensive insurance coverage grew. Today, insurers cover a wide range of space-related risks, reflecting the sector’s growing complexity and commercialisation. Cover includes:

• Pre-launch: Covers the satellite from manufacturing, through transit to the launch site, testing, fuelling, and integration with the launch equipment.
• Launch: Covers the launch, orbit raising, in-orbit testing, commissioning into service, and potentially in-orbit operations for the remainder of the year.
• In-orbit: Covers satellites during their operational life, including damage or failure to perform according to specifications. This is crucial for operators as it covers the costs of repair or replacement of malfunctioning satellites. Polices may include revenue loss due to operational disruption.
• Third-party liability: Covers legal liabilities for bodily injury or property damage to third parties when the space object is on the ground, during launch, or in orbit. This coverage is essential for meeting regulatory requirements.

Insurance requirements in European law and regulation

Most European countries are signatories to the Convention on International Liability for Damage Caused by Space Objects 1972 (the "Liability Convention"). The Liability Convention holds states responsible for damage caused by a space object for which they are a "launching state", where the damage arises from a fault of that state or a person for whom that state is responsible. This includes activities carried out by nationals in other jurisdictions. A state will be a launching state where (a) it either launches or procures the launch of a given space object, or (b) the space object is launched from that state's territory or facility.

In part to derisk the state responsibility conferred by the Liability Convention, many European countries mandate entities involved in space activities to (1) indemnify them for their liabilities under the Liability Convention, typically up to a cap, and (2) to obtain insurance to stand behind that indemnity, as conditions for receiving launch and in-orbit operation licences. However, these indemnity and insurance requirements differ between jurisdictions:

• France: Article 6 of the French Space Operations Act (FSOA), which entered into force in 2010, requires an operator to obtain third-party liability insurance of €60 million for launch operations. The insurance must cover the State and its public bodies, the European Space Agency and its Member States, the operator and persons who have participated in the production of the space object or in the space operation. The liability risk exposure of launch operators is limited to the insured amount (i.e., €60 million). A similar fixed limit regime operates for in-orbit licensing, although liability is unlimited.
• UK: The UK has a comparable mandatory insurance regime under the Space Industry Act 2018 and Outer Space Act 1986. Under this legislation, operators must indemnify the UK Government for its liability arising under the Liability Convention, up to a cap which is generally set at €60 million. Additionally, operators carrying out spaceflight activities in the UK are strictly liable for damage caused to third parties on land or water in the UK, or to aircraft above them. This means that third parties can bring claims against licensees for such losses without having to prove fault. Operators are required to meet an insurance requirement to stand behind these obligations. For standard missions, this requirement is for a €60 million "any one occurrence" third party liability insurance policy, but the requirement may be lower or higher for low and high-risk missions respectively. For missions involving launch within the UK, the insurance requirement is calculated on a case-by-case basis based on the Civil Aviation Authority's standard methodology, the "Modelled Insurance Requirement".
• Germany: Germany currently has no legal requirement to indemnify the German government, nor to obtain space insurance, but in 2024 the government introduced plans for a dedicated Space Act. The proposal would mandate either liability insurance or a financial guarantee for space operators. Operator liability would be capped at 10% of the average annual turnover over the previous three financial years, up to a maximum of €50 million.

Space tourism

The commercial human spaceflight sector is expanding, with companies offering suborbital flights to private individuals.

Space tourism insurance is an emerging product tailored to the unique risks of commercial human spaceflight, including passenger injury, radiation exposure, fatalities, and vehicle malfunctions. Some policies may also cover training-related injuries or trip cancellations. However, pricing these policies is challenging due to various factors including:

• Lack of data: Unlike traditional aviation or other established industries, space tourism is relatively new, with limited historical data on which to base risk assessments. The absence of extensive precedent makes it difficult to predict potential risks and their likelihood accurately.
• Diverse participants: Unlike trained astronauts, space tourists may have varying levels of training and physical fitness affecting their ability to withstand the stresses of space travel and deal with unexpected incidents.

Collision risk

Launch activity is soaring, with companies deploying satellites at a record pace. Many of the satellites being deployed are low earth orbit (LEO) satellites deployed in large constellations. This has intensified orbital congestion and raised collision risks.

In-orbit insurance typically covers collisions with debris and micrometeoroids, but the growing threat is prompting insurers to reassess their exposure. Pricing remains challenging due to the unpredictability of collision risks, especially from untracked debris and the surge in the number of satellites in orbit.

To maintain sustainable insurance offerings, insurers must adopt robust risk assessment and mitigation strategies. Examples include:

• Tracking systems and data

Accurate risk understanding enables underwriters to set appropriate premiums, apply tailored conditions, recommend loss prevention, and streamline claims and assessments. Insurers depend heavily on external tracking data to evaluate collision risks.

Encouragingly, governments are investing in space surveillance systems. The EU’s EU-SST consortium, comprising of 15 nations and chaired by France, tracks over 400 satellites through its CAESAR service. Similarly, the UK operates its own system, ‘Monitor your satellites’, to support national tracking efforts. These initiatives enhance insurers’ ability to assess and manage orbital risk effectively.

• Regulations and standards

To address growing concerns over space congestion and collision risk, states are advancing regulations and international standards to promote sustainable space operations. These frameworks help preserve the long-term insurability of space activities by defining clear benchmarks for safe and responsible missions and encouraging sustainable practices. For insurers, such standards help them price policies such standards support more accurate risk assessments and enable preferential terms for compliant missions – a practice explicitly encouraged by states such as the UK. Examples include:

• France has mandated debris mitigation in its regulatory framework via a Technical Regulation. French operators must provide plans and evidence that they will meet these requirements throughout all phases of a space mission in order to obtain authorisation.
• The UK has consulted on linking insurance liability limits to mission sustainability. The plan would lower the liability cap for operators where a mission is deemed ‘sustainable’ (e.g. there is enhanced trackability data, or there are sustainable end of life plans to de-orbit a satellite). However, the consultation closed before the 2024 election, and does not seem to have been revisited since.
• Earlier this year, this British Standards Institute (the UK's national standards body) published two consultations on developing a universal set of principles and considerations that can be used to assess sustainability, in partnership with the UK Space Agency and Department for Science, Innovation and Technology. These standards could be utilised by insurers when undertaking assessments.
• In June 2025, the European Commission proposed the EU Space Act which would harmonise space laws across member states in the three core areas of safety, resilience and environmental sustainability. Among other things, it would set minimum standards for object tracking, debris mitigation, cybersecurity requirements, and environmental impact assessments. Member States would be permitted to apply more stringent national standards.
• At the international level, ISO 24113:2023 sets high-level debris mitigation requirements and the Inter-Agency Space Debris Mitigation Committee published related guidelines in 2025. The UK is currently chair of the ISO 24113 Debris Mitigation working group which aims to develop these standards to keep them relevant as space activities evolve such as the proliferation of satellites and large-constellations.

Conclusion

Space insurance has evolved into a mature and essential component of the global space economy. Many jurisdictions now mandate insurance coverage as a prerequisite for licensing space activities, and others are moving in that direction. As innovation accelerates—such as emerging ventures like commercial human spaceflight and satellite proliferation— new insurance solutions are emerging to help manage the complex risks associated with these ventures.

These innovations offer policyholders access to tailored coverage options that align with the specific needs of modern space missions. On the one hand, the expansion of space activities opens the door for insurers to develop bespoke products such as those covering commercial human spaceflight, but on the other, underwriters must grapple with heightened uncertainty in risk assessment, actuarial modelling, and premium pricing due to limited data and rapidly evolving technologies.

In Europe, growing emphasis on sustainability and responsible orbital behaviour is shaping regulatory frameworks. These developments support more accurate underwriting and long-term insurability, helping to maintain the availability and sustainability of space insurance offerings. For policyholders, this means greater clarity, stability, and access to insurance products that are aligned with both operational needs and regulatory expectations.

Authored by Charlie Shute and Erin Davies.