Commercial space age – coverage for satellites on collision course?

At the end of last year, China informed the UN office for Outer Space Affairs that for a second time, its space station had to conduct evasive manoeuvres to avoid collisions with Starlink satellites. The incident highlights that private companies like SpaceX – which launched Starlink – run space programmes and have joined national players in the space race. With dense satellite coverage, Starlink and competitors aim to provide high-speed broadband to even the remotest places on Earth.

National space organisations (eg, NASA) are eager to partner with new commercial players, and bodies like the European Commission advocate “space for everyone”. This underlines the opportunities offered by space exploration, both commercial and public-sector sponsored.¹

It is estimated that the commercial space industry will be worth USD 1 trillion by 2040, up from USD 350 billion currently.²Activities that will emerge and intensify range from the private launch of rockets for tourism and commercial payloads, to space stations and space mining. Most importantly, commercial interest is focused on satellite systems enabling ever more data services on Earth. This includes broader internet access and data services, such as navigation and climate change and weather monitoring.

Increasingly, innovative technologies are born of private commercial activities, in addition to those from traditional government-funded missions. But for innovation to happen effectively, and to safeguard the economic benefits from space, there needs to be effective national and international regulation.³ International collaborative efforts are needed to mitigate increasing orbital debris, encourage active debris removal and the timely disposal of end-ofmission spacecraft, and to find methods and technologies to removing defunct spacecraft.⁴

With more parties and objects roaming the orbit, the risk of collision of space infrastructure and debris increases, and this in a largely unregulated sector.⁵Binding international regulations to steer or restrict space traffic, that would oblige originators of debris to “clean up” or be held liable for damage, do not yet exist.

Traditionally, insurers have offered third-party liability insurance to commercial space operators for damage to satellites, rockets and unmanned spaceflights. So far, appetite to offer liability cover for private space passengers is minimal. That could change. Soon, there could be new policies that insure for bodily injury for space travellers, flight delay, and directors and officers’ (D&O) covers for the management of space operating companies. Such policies will need to be available on the market before space travel can transform into a fully-functioning tourism offering. Internationally-binding regulations to order space traffic, rights and duties could boost the currently limited appetite of insurers to provide L&H, liability or D&O covers in the context of space tourism and other space activity.